A valuation process for intellectual property in a technology park environment

With the rapid development of the global economy, intellectual capital has become a critical driver of a business's sustainability. The essential difference between companies operating in the 'old' and the 'new' economy is that, where value in the past was created within industrial sectors such as manufacturing, education, retail, wholesale and financial services, value in the future will be created primarily from the application of knowledge. Increasingly, the main assets of 'smart' companies will be in the form of intellectual, and not physical, capital. Technology development is a logical product of intellectual capital. Thus, in the new economic paradigm, companies perceive technology developments as necessary commercial activities to underpin their competitive standings, and provide a platform for economic growth, profitability and shareholder value. However, the development of commercially viable intellectual capital projects also requires substantial investments in intellectual property, often without certainties of success. Since valuation techniques and processes are crucial for business investments, this paper evaluates the various methods that are currently used to value intellectual capital and intellectual property, and finds that, in view of substantial inadequacies, there has arisen an imperative need to develop a n e w process for valuing these.