Investing in the Future of Technology
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We were joined by two of the directors of Cipher and the hosts of the Cipher Vision podcast to speak about the Future of Technology:
- Scott Bell, Chairman of UK Investment Banking, and Global Co-Head of Consumer, Deutsche Bank
- Stephen Halliday, Chairman, Cipher and and former CEO of Wood Mackenzie
- Francesca Levoir, Head of Marketing, LexisNexis Cipher and podcast co-host
- Nigel Swycher, CEO, LexisNexis Cipher
Highlights of the season finale
Communication with the Board
What we’ve done is create this blend of push and pull. IP professionals now realize that their place in the world isn’t to file for more patents, but to help organizations manage risk and generate value. That’s what the boards want them to do and I think having accessible data empowers them to do that. What Steve and Scott are suggesting is that we’re also going to see that pull. We’re going to see the board being pressured to talk about intangibles and only being willing to do it, if there’s hard facts and hard data.
Why are boards not asking more about intangible assets?
They don’t realize what’s possible. Patent professionals have been a little bit in the background of the strategic debate. But with Cipher, they can now be part of the strategic conversation about future technologies. Once they’re shown the tool and their capabilities to analyse technologies, there’s no going back. What we’ve seen over the time is an acceleration in the conversations with companies. It used to take some time to persuade them of the veracity of what could be achieved. It’s now, “what can you do to help me do my job better and be a voice in the boardroom”. This is such an opportunity for patent professionals to step into the board, into the key strategic debate for companies and to use that expression, ‘to be in the room when it happens’.
Every company, every industry is now a Tech. It’s PropTech, it’s AdTech, it’s FinTech. So you can look at patents in two ways. Yes, they’re an asset, although they’re not accounted for, but actually what they really are is protection for the technology. It’s those technology trends that Steve’s just talking about – understanding a company’s competitive position in key technologies of the future. Why wouldn’t boards and investors be interested in that? And I think the answer is to date, they haven’t had the ability to access that information but now they should.
Investment into intangibles
Are investors driving boards to look into intangible assets?
It’s going to be a sort of virtuous circle. You’re going to have investors asking for it and companies wanting to display it. It’ll reinforce itself. But I would say the way that financial markets operate for every asset class that’s ever developed, you need two things. First of all, you need to understand who owns what. Until now, it’s been very hard to do that in the world of patents. It’s been too complicated. And secondly, you need to be able to compare. We will struggle until we have some shorthand for investors and boards to say we are strong or not strong in a particular technology. But I think that’s just coming.
ESG
ESG, is the change event that’s actually going to bring this into focus. There are so many funds which Scott will know of that are being launched to invest in companies that are active in ESG. But there’s no data analytic evidence of activity, there’s just words. Actually ESG is a classic example of an area that will actually demonstrate the value of assessing whether a company’s actually investing in technologies or whether they are just talking a good game.
So how can you prove your ESG? You need more facts. And what can be a bigger fact than a patent with an underlying technology?
There was an early economic paper published by NBER about green patents. What that said was, there’s an incredible lack of transparency that’s generating an inequality or an unfairness that certain companies are being demonized for having an interest in, say oil, but they’re investing billions in renewables. This DNA aspect, this x-ray aspect of saying, “well, you’re saying you’re helping the planet. But are you?”. Cipher cuts through that noise and says, “Well, yeah, you’re investing billions. And it’s generating these assets, these patents, this footprint of the technology work that you’re doing.” If you say you’re working in that area, you must be able to evidence that you are and transparency about what technologies you own is an important part of that story.
The Future of Technology
One of the themes across a lot of Cipher Vision podcasts is this common language or common communication. If we’re thinking here about the IP professional, those in the boardroom and investors, what do you think the future holds?
When Nigel and Steve Harris set up this company with Scott’s backing eight years ago, they were certainly visionary, maybe slightly early. They’re not early now. If we could fast forward five years, we’re going to be having a situation where technology and an analysis of technology will become much richer, much more analytic. What we’re talking about today will become common currency. It comes back to that opportunity over the next five years for patent professionals to lead and drive that debate, to be at the forefront of it.
Once you’ve got that base layer of understanding about what technologies patents protect, and the value of a patent, I think then you’ll see in financial markets, an explosion of creativity, which always happens in different asset classes. So there will be more lending against patents, there will be more insurance against patents, there will be more investment in equities through a window of patents. You’ll see this whole ecosystem developing on the back of the starting point, which is who owns what and how do you compare them. But you have to get the ground zero first before you can build the rest of the house.
Message from the CEO
You have to ask yourself why Steve and Scott are so committed to patents. The stark reality is that they’re not. They’re committed to insight and value. What patent information offers is the potential to reveal facts about the current levels of investment in innovation, in technology. The ability to x-ray companies, the ability to understand the DNA of their intangible assets. From an investor perspective, this is pure gold. Access to information about what companies and sectors are doing without the clutter of spin. From a strategic patent intelligence perspective, we have Scott as the first investor and Steve as the Chairman of Cipher to thank for giving us the confidence and clarity to continue with our vision. Which is to unleash the strategic value of patents. To bring transparency to technology and innovation trends and break open the amorphous mass that we like to call intangibles.