The prospect for intellectual property in 2023 is strong. While our current inflation rate exceeds seven percent (7%) in the last twelve months, technology innovation consistently has a deflationary effect. For example, in a high-technology area like television manufacturing, the U.S. Bureau of Labor Statistics reports that between 1950 and 2022 televisions experienced an average inflation rate of -6.47% per year. A television costing $1,000 in 1950 would cost $8.11 in 2022 for an equivalent purchase.
In contrast, traditionally lower technology areas such as food and beverage between 1950 and 2022 experienced an inflation rate of 4% a year but in the last two years that has increased in 6.48% and in the last year 9.21%. For 2023, the agricultural sector is a prime target for innovation and scaling up new efficiencies. Additionally, public policy should acknowledge that inflation is highly regressive on the least affluent of our society. Governments might consider how innovative solutions from the private sector can reduce the impact of inflationary costs across all economic levels.
Innovation is More than New Features
There is a common misunderstanding that innovation is limited to new features and capabilities. However, in our experience the most lucrative IP is secured for improvements in efficiencies. Why? These are so much easier to quantify. If a new fan on a jet engine reduces fuel consumption by 1% it is extraordinarily easy to convey the value proposition of this new technology. For a new method of manufacture offering full or partial automation in assembly the reduction in labor costs is easy to calculate. If a new design provides all the same functionality with less expensive materials or fewer parts that value is evident to the licensee or assignee.
Opportunities for 2023
Albert Einstein was quoted as saying “[i]n the middle of difficulty lies opportunity.” We urge our clients not to limit their innovation focus to only new features but to improving the efficiency in sourcing, manufacturing and operation of existing technologies. In doing so we apply our creativity and intellectual capacities to reducing the regressive impacts of inflation on our economy and quality of life.