Proceedings of the 8th International Conference on Intellectual ...

Hezlin Harris et al.
(Burrone and Singh, 2003). Typically this is to be achieved by exhortation, public relations,
advertising, road shows, and so on; and by adapting <strong>the</strong> IPR system to make it more appropriate for
SMEs with petty patents and <strong>the</strong> like. SME owners also prefer to use informal methods to protect <strong>the</strong>ir
IP and allocate <strong>the</strong>ir resources to <strong>the</strong> development <strong>of</strong> new product and process innovations (Kitching
and Blackburn, 1998). WIPO stated that among <strong>the</strong> reasons why many SMEs are sometimes slow to
protect <strong>the</strong>ir IP includes insufficient information on <strong>the</strong> relevance <strong>of</strong> IP in day-to-day business, high
costs associated with obtaining and enforcing IP rights, perceptions that <strong>the</strong> IP system is esoteric, too
cumbersome and time-consuming. It is however, not sufficient that SMEs merely protect <strong>the</strong>ir IP rights
(IPR). SMEs must manage <strong>the</strong>ir IPR advantageously; this includes using IPR to protect innovative
concepts and products (Jackson, 2002). Thus, in order to enhance SMEs competitiveness in <strong>the</strong>
ASEAN, Macdonald, Turpin and Ancog (2005) recommend that <strong>the</strong>re is a need to generate
confidence among SME top management in <strong>the</strong> value <strong>of</strong> IPR for <strong>the</strong> business strategy and <strong>the</strong>
capacity <strong>of</strong> <strong>the</strong> system to safeguard <strong>the</strong>ir IPR.
In <strong>the</strong> ASEAN region, large firms and foreign firms typically dominate <strong>the</strong> IPR world, particularly
patenting. SMEs tend to see little link between any form <strong>of</strong> IPR and <strong>the</strong>ir innovation (Macdonald,
Turpin and Ancog., 2005). It is also <strong>of</strong>ten argued that IPR are both costly to acquire and to enforce as
SMEs are at disadvantage due to <strong>the</strong>ir firm size and <strong>the</strong>ir ability to use IPR to get appropriate returns
from <strong>the</strong>ir innovative efforts (Jensen and Webster, 2006; Cordes et. al, 1999; WIPO, 2003 and
Macdonald, 2004). In ano<strong>the</strong>r study by Macdonald, Turpin and Ancog (2005) found that some SMEs
have integrated various forms <strong>of</strong> IPR into <strong>the</strong>ir marketing and business plans where trademarks and
trade secrets appear to be more valued than copyright and industrial designs. They found that <strong>the</strong>re is
a tendency for SMEs to focus on business development and marketing strategies but less focused on
technological innovation. These findings were supported by Arundel and Kabla (1998) where <strong>the</strong>
findings revealed that small European firms have a lower propensity to patent <strong>the</strong>ir innovations than
large firms.
SMEs faced a number <strong>of</strong> challenges as discussed by Moha (1999), Hall (2002), SMIDEC (2002),
Wang (2003) and Stuti (2005). The challenges included, lack <strong>of</strong> financing, lack <strong>of</strong> managerial
capabilities, poor access to strategic knowledge and technology as well as heavy regulatory burdens.
In <strong>the</strong> context <strong>of</strong> Malaysia, Saleh and Ndubisi (2006) found that SMEs have low levels <strong>of</strong> technological
capabilities, limited skilled workforces, low level <strong>of</strong> ICT penetration, lack <strong>of</strong> research and development,
limited market focus, intense external competitors, and face bureaucracy barriers to incentives and
funds. Govindaraju and Wong (2011) revealed that lack <strong>of</strong> industry alliance, finance, poor structure <strong>of</strong>
<strong>the</strong> technology commercialization <strong>of</strong>fice, poor information process, lack <strong>of</strong> demand oriented research
and poor IP management are <strong>the</strong> major impediments in <strong>the</strong> commercialization process. Ano<strong>the</strong>r major
impediment in implementing strategic technological initiatives such as knowledge management
systems is <strong>the</strong> lack <strong>of</strong> resources (Wong and Aspinwall, 2005).
Motivated by <strong>the</strong> obstacles faced <strong>the</strong> SMEs in Malaysia, this paper attempts to propose <strong>the</strong>
development <strong>of</strong> Decision Support System (DSS); a technological solution in facilitating <strong>the</strong>m to value
<strong>the</strong>ir IP. The proposed DSS is expected to be a stimulant in driving SMEs to not only pursues
innovation activities but to progress forward to commercializing <strong>of</strong> <strong>the</strong>ir innovation outputs. This will
help ensure SMEs to be more engaged in <strong>the</strong> commercializing <strong>of</strong> <strong>the</strong>ir IP, and ultimately enhance
<strong>the</strong>ir capability to exploit, value and commercialize <strong>the</strong>ir IP.
4. Valuation <strong>of</strong> IP
In order to capture and capitalize <strong>the</strong> intellectual property (IP), valuing <strong>the</strong> IP becomes a pertinent
stage in <strong>the</strong> road to exploitation and commercialization. Valuation <strong>of</strong> IP requires a sound background
in marketing, technical and financial knowledge. This is a challenge for SMEs as <strong>the</strong>y are
characteristically less sophisticated in <strong>the</strong>ir management styles and strategic knowledge and skills.
Valuation <strong>of</strong> IP is not simply an accounting procedure but somewhat an effort to consolidate facts and
figures pertaining to a given IP or business project, such as development costs, expectation <strong>of</strong>
income, comparative advantages and market data, for <strong>the</strong> purpose <strong>of</strong> making better strategic
decisions. The valuation process can take into account <strong>the</strong> influence <strong>of</strong> IP not only on projects and
products but also on <strong>the</strong> business operation and on its competitive position as a whole (Roy, 2004).
There is a plethora <strong>of</strong> research concerning methods in valuing IP. Various models can be justified
under many different circumstances. Within each <strong>of</strong> <strong>the</strong> various models, <strong>the</strong>re are different variations
that can be applied. The choice <strong>of</strong> model significantly influences <strong>the</strong> resultant valuation estimates and
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