Virtual Monopoly

Citation

Mattacks, K. (2003), "Virtual Monopoly", Leadership & Organization Development Journal, Vol. 24 No. 2, pp. 113-114. https://doi.org/10.1108/lodj.2003.24.2.113.6

This book is about intellectual property and this is, apparently, a subject that is “hot news”. At first thought, it may not appear that way to you. But wait! Have you or has anyone in your family downloaded music from the Internet and “burned” it on to a CD or expressed concern about the high cost of drugs or medicines here and in developing countries? What implications do these issues have on the way a company manages its “know‐how” and what is the impact on the development and leadership of organisations?

In recent years, it has become less usual to look solely at a company’s financial and to focus on intellectual capital as well. Andrew Mayo (2001) describes this in his new book The Human Value of the Enterprise as the sum of its human capital (talent), structural capital (intellectual property, explicit knowledge) and customer capital (client relationships). Many companies, such as Skandia, now routinely value these intangible assets which, although levels vary between sectors, are estimated to be around 76 per cent of the value of most Fortune 100 companies.

Christopher Pike is a patent and trade‐mark lawyer who has worked with pharmaceutical and technology companies and now runs his own consultancy advising on applying creativity to intellectual property services. His central message in this book is that businesses of all sizes can take advantage of the business opportunities offered by intellectual property. He argues that, on its own, creative advantage is incapable of forming the basis for strong, sustainable business advantage. What really matters is a company’s ability to protect and use that advantage by building “exclusive business space” around that creative advantage. The aim of the book is to show how to do this through the use of intellectual property. Pike sees as creative vision as the starting‐point but intellectual property is what he describes as the “enabling currency”. The value that is in people’s skills and creativity has to be protected long enough to secure the returns.

The book is in three sections. The first looks at the economics of virtual monopoly, that is applying intellectual property in the form of trade marks, copyright and patents to what the company has developed. Part two discusses the challenges facing the builders of virtual monopoly, not least of which is the growing public unease that surrounds it. Part three covers a range of tools for building virtual monopoly in content, brands, technology and organisations themselves. This section includes a very useful nine‐point “road‐map” or check‐list for developing a virtual monopoly organisation.

The book describes the benefits of using intellectual property as a business tool. Pike recognises, however, that for some it has become a matter for serious concern and unease that a US company can, for example, seek to patent the therapeutic use of turmeric that has been used as a traditional remedy in India for generations. The main concerns that Pike highlights are:

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  concentration of intellectual property in the hands of fewer, global players;

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  its use to establish abusive monopoly positions;

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  effects on local and emerging economies; and

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  patenting of the human genome.

The author gives these issues a brief airing but concludes that the overall danger is that the opportunity of virtual monopoly economics may be quashed for purely political reasons before it has had time to deliver its full potential. This is a difficult arena but I guess it is inevitably a political one. How else can we balance the right of companies to exploit what their people create with the broader needs of communities?

Overall I enjoyed the book, which certainly added something to my thinking about the development of organisations. Much of the literature on knowledge management and intellectual capital dwells only briefly on intellectual property. I would certainly recommend this book to a business manager who wishes to increase his or her understanding of the issue of intellectual property and the ways in which it can be used to generate wealth. It will also, naturally, be of interest to practitioners in this area and the organisation development and knowledge management community.