Financing of Intellectual Property: Developing Countries’ Context

Abstract

Converting a creative idea into a financial asset is the essential feature of financing intellectual property (IP). IP can be sold, licensed, used as a collateral or security for debt finance. Valuation of IP is also important to secure loans or finances for business. Whereas in the developed world, IP is treated as an asset and a part of the company’s portfolio, this is less prevalent in developing countries because of the level of their development and very meager IP portfolio in general. Financial constraints and lack of infrastructure are also hurdles creating and maintaining IP in developing countries. Capacity building for innovation is a very significant requirement in IP infrastructure. The industries in developing countries need to appreciate that a good portfolio makes good business sense.