donderdag 24 mei 2012

We will innovate our way out of recession I

In one of my earlier posts, I have shown that the expansion of total debt in the United States has virtually come to a stand still. Most probably, in Europe the very same flat line off total debt development will be shown. Despite the enormous gouvernemental injections of new freshly printed money, the total debt will not increase anymore. Thus, the additional money inserted by governments Quantitative Easing will be fully absorbed by existing debts in entities, cities, insurance companies, family households, retirement funds and predominantly banks redeeming their debts and shrinking their balance sheets.

So the vast debts made are shifted to the public domain, on the tax payers account. These taxpayers will on a global scale face a considerable increase in taxes and a decrease in public services like good education, a properly working health system and well maintained infrastructure.  Since the taxpayer will thus loose a considerable amount of purchasing power, less will be consumed and less money will be spend.

What this means is that no additional funding will be available, and that the existing and potentially shrinking amount of money need to be shared amongst us. A strong and potentially lasting deflation period is likely to occur. This results in more competition for money at all levels: money for loans, money for capital investments and money from clients buying products or services. A hoarding of money will occur, simply because the very same money will have a higher value tomorrow.

The competition for money is most likely be won by those enterprises that produce a better balance between quality and price of their products or services. The balance between quality and price can only be improved by continuous innovation and proper protection of this innovation.

Accordingly, in this competition, only those companies that innovate and protect their innovations well will be able to win this competition for money. This money is again is needed and used for properly expanding their business. Accordingly innovation, more specific protected innovation will be the engine pulling enterprises, their employees, the tax collecting authorities and finally all of us both locally and globally out of the recession.

That innovation needs protection is obvious, in order to reward innovators a temporary monopoly for their efforts invested. Would on the other hand innovation easily be copied, once it has proven successfully, it will lead to a direct punishment to the very innovators who took the risk of investing time and resources in innovation in the first place.

In that light a properly functioning and affordable patent system, which is affordable for the private inventor, SME's and large corporate enterprises and a transparent patent marketplace is essential.

A transparent marketplace for innovations is not yet available. It is my firm believe that a transparent market place for innovations should be developed by a commercial party, very much as the stock exchanges are organized. Most likely this will be a global platform where innovations can be obtained, invested in and auctioned. In the years 2005-2010, it appeared that the US based company Ocean Tomo was heading for such open, transparent and globally accessible auction based market place. Nowadays the patent auctioneering part is sold to ICAP and within this company a more closed and secrete atmosphere around the auctions is generated, where auction data are no longer given out or published.

An affordable patent system implies as little procedural effort and as little expenditure as possible for a high quality patent. Such that innovators can optimally invest their resources in innovation and market deployment. A unified European Patent system would reduce procedural efforts and reduce costs to about 20% of the current expenses for obtaining pan European protection.

However, in Europe, some countries are still actively blocking the development of a unified European Patent system, thereby inhibiting our pan European chances of exiting the upcoming recession. To those states I can only say: SHAME ON YOU ITALY, SHAME ON YOU SPAIN FOR BLOCKING THIS DOOR TO A MORE PROSPEROUS FUTURE OF EUROPE. [1]

In the light of the upcoming recession, I hereby appeal to European governments to invest in innovation by simplifying the European patent system to one unified patent, being trialled in one unified court [2]. Most preferably, this court should be in the European state with most patent applications and most infringement cases, being Germany.

If this is not possible within the EU (what strongly appears to be the case), than maybe it is time to dust off the old EPLA (European Patent Law Agreement) in order to circumvent EU blocking tactics, starting with a small number of signatory states, similar to the EPC (European Patent Convention). Most likely the first signatory states are: Belgium, Luxemburg, France, Germany, England and the Netherlands, exactly those states that exerted the efforts to draft a European patent convention. It only needs to be finished!




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