David Houle - IP, Big Data, and Society (Entering the Shift Age, eBook 10)

Modern humanity has been around for approximately 150,000 years. During this time there have been four ages. Each age has had its primary form of wealth creation.

Of course all forms of wealth creation listed about are present in the Shift Age. It is just that in this new age the value of Intellectual Property will be ascendant.

IP in the Information Age

Intellectual property includes patents, trademarks, copyrights, trade secrets, and all forms of human expression in content. Another simple way to think of IP is all intangible or non-physical assets. Recognition of the value created by intellectual property, particularly in business, truly started to lift off in the Information Age. It took off to such an extent that it changed the fundamental notion of how companies are valued. In 1975, at the very beginning of the Information Age, 16.8 percent of the market capitalization of the S&P 500 was attributed to intangible or non-physical assets. By 1995 that number had grown to 68.4 percent. In 2005, just before the start of the Shift Age, it was up to 79.7 percent. The fundamental transformation of our business economy is now complete, as intangibles remain steady at around 80 percent of corporate value. As my friend Jim Malackowski describes it, we have now completed an intellectual revolution no less significant than the industrial revolution more than 100 years before.

IP in the Shift Age

The Shift Age will see the value of IP become even more important to the businesses which create it, as markets develop to transact IP as a product and companies are bought and sold first for their IP rights.

Think of some recent businesses that are pure IP: mobile apps, computer software, and touchscreen technologies. In the past four years I have spoken to some 200 groups of CEOs around the world, mostly groups from Vistage International. When I present this concept of IP as the source of wealth in the Shift Age, on many occasions CEOs have interrupted my presentation to comment on the veracity of this concept. Every one of these CEOs reported that they got more money selling their company because of its IP than they ever could have received based upon multiples of revenue or profits. They all confirmed that the strategic purchaser of their company paid for the IP because of their intention to scale up or leverage the value of this asset. This leads me to tell CEOs and companies anywhere in the world to focus on what IP they have. What is your IP, and what might its value be?

In past ages, IP was seen only as defensive legal protection. That of course is still the case.

However in the Shift Age, the Accelerating Electronic Connectedness of humanity is creating new wealth creation models of IP monetization, even including the counterintuitive notion of giving IP away. In this new connected age, content can move rapidly and widely, reaching audiences infinitely more quickly than ever before.

Opportunities exist in having your content and your IP recognized by the larger market.

I often use my own experience as a futurist as an example. Seven years ago, I launched my blog www.EvolutionShift.com. Two to three times a week for the first couple of years I researched, wrote, and uploaded columns under the tagline A Future Look at Today. In other words, I gave my content away to the world. I committed hundreds and hundreds of hours of work to publish my thoughts to the world, all for free. After about a year I had built up a following. This following then started to reach out to me to see if I would attend conferences. Then I was asked to speak to groups and was paid to do so. Then, when my first book, The Shift Age, was published, a lot of the content was updated, reorganized content from my blog. So in two short years after I had started to give away my content, my IP, I was earning a living speaking and writing about the future. The blog of freely given IP has now resulted in a full-time occupation as a futurist. The blog of free content has led me, in the last two years, to speak some 200 times in eleven countries on all six inhabited continents.

The interesting thing about Accelerating Electronic Connectedness is that it has disintermediated a number of distribution models. This has allowed creators of content to monetize their creative content by providing it directly to the consumer. Musicians and bands often give away two or three songs on the Internet in hopes that will drive customers to the bands website for a direct purchase of the music, middlemen or distributors excluded. Unpublished novelists sell novels as ebooks for $.99 to create large fan markets. Give and receive in the age of connectedness.