IP debt finance and SMEs: Revealing the evolving conceptual framework drawing on initiatives from around the world

Abstract

This chapter surveys and analyses how the increased integration of the intellectual property (IP) rights system within the globalized economy could accelerate business outcomes for young IP-rich small and medium size enterprises (SMEs) if lenders adopt a new mind-set to IP-backed debt finance. The phenomenon of globalization, namely, the increased interconnectedness of the world’s countries, has a profound influence on the business, legal and finance framework. In this post-financial crisis environment, the banking and finance sector has largely retreated from traditional lending practice. Although access to finance is a universal issue, how can IP-backed debt finance grow in a globalized world? What IP finance trends and initiatives are currently afoot to support national competitive advantage and economic growth? The range of international initiatives to enhance IP-backed debt finance has never been fully explored in any of the innovation or IP finance literature. This chapter reviews a variety of international initiatives being undertaken to facilitate the expansion of IP-backed debt finance to improve liquidity and to support young IP-rich SMEs in the UK, the E.U., the US and Asia. It attempts to set a high level agenda for informing IP debt financing for SMEs policy. It also analyses the contributions of certain regional Intellectual Property offices, international inter-governmental organizations, the World Intellectual Property Office (WIPO), the United Nations Commission on International Trade Law (UNCITRAL) and leading commercial banks in this regard. By combining the body of knowledge emanating from over two decades of developments from a global perspective, this chapter provides a synthesized understanding to inform future IP finance policy directions. It introduces the systemic changes needed to support the agile development of globally enhanced SME access to IP finance in the post-recession economy.