Sunday, September 14, 2014

SEA companies own too little IP

Boston Consulting and Stanford University published it its New Global Challengers Report which identified 100 top companies from rapidly developing economies that are making a global impact. Several ASEAN companies appeared ,such as CP Foods and Thai Union Frozen Foods from Thailand, Indofood from Indonesia, Malaysia International Shipping  and Malaysia’s Petronas Oil. Several others mostly in the commodities space got mentions too.

The report specifically contains an IP section, which states in essence how rapidly developing economies do not own much IP and innovation is very light. That is probably reflected in the list’s bias to commodity and energy companies and that many state owned enterprises are there. China is represented by many manufacturing companies and India with many pharma players. But SEA feature only commodities and foods companies - mostly with weak IP positions. This is a cause for concern. Packaged foods businesses like CP, Thai Union and Indofood are brand based so they have built a certain level of IP. However the real problem in this region is the lack of technology investment.  This makes all these companies vulnerable to being overtaken by anyone else who can work their space better. Innovation and the consequent IP created gives businesses an added weapon to resist competition. Few outside China and India in these New Global Challengers, and none of the SE Asian companies have strong IP positions.

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