Mr David Haigh
Chief Executive Officer, Brand Finance
Dr Srinivas Reddy
Director, Centre of Marketing Excellence, Singapore Management University
Distinuguished speakers, colleagues, ladies and gentlemen
A very good morning to all
1. It is my pleasure to give the opening address today at the Brand Finance Asia Pacific Forum organised by Brand Finance Singapore and the Singapore Management University.
2. The theme of the forum is BrandVIP 2010: Growing the Value of Brands & Intellectual Property. Not surprisingly, global brand names at the top-of-the-mind recall are, more often than not, owned by the larger companies. These companies have invested in brand-building for the long term, not just by advertising, promotion and marketing, but also in spending time to understand their customers, developing innovative products that anticipate and meet their needs. More importantly, they create an organisational culture where employees strongly identify with the brand, understand their contribution to the brand’s success and are committed to it.
3. Successful brands can become good role models for our smaller businesses. These brands offer insights on the brand as a strategic asset that can help smaller businesses to compete in the global market. A good way to facilitate the understanding of brands is to highlight both global and local success stories. I am confident that Brand Finance’s annual report on Singapore’s top brands, showcasing success closer to home, can inspire our smaller businesses to strategise their brands and branding activities in a more effective and meaningful manner.
4. To help local businesses get started on this important journey, government agencies such as SPRING Singapore and IE Singapore are proactive in putting together many forms of assistance. The Intellectual Property Office of Singapore, IPOS, has in recent years complemented their effort by helping companies understand how to inventorise and manage their intellectual assets in the course of strategic business planning and brand building.
5. Constituted from a former government department into a statutory board under the Ministry of Law on 1 April 2001, IPOS has built a robust IP regime that is, at the same time, pro-business. For example, Singapore played a key role in facilitating the international adoption of the Singapore Treaty on the Law of Trade Marks in 2006, which has benefited trade mark administration authorities in streamlining procedures that translate into a simpler process and lowered overall costs for brand owners using trade mark registrations as a first step to protect or license their brands. We are also signatories to major conventions such as the Madrid protocol. Essentially, Singapore’s accession to the Madrid protocol makes it possible for a Singapore trademark owner to have his trademark protected in several countries by simply filing one application with IPOS.
6. To increase the breadth and depth of IP services that are available to businesses, IPOS has also put together a directory of IP services providers, where companies can find expertise to advise them on IP issues or to build brands. We have also consolidated IP training opportunities in a calendar on IPOS’ webpage. The IP training calendar makes it easy for managers and IP practitioners to keep track of the IP workshops and courses they would like to attend. Recognising that a holistic approach is necessary to enhance talent development efforts within the IP industry, IPOS is also currently in the process of working with the industry to devise an IP competency framework to help IP professionals better understand their training needs and plan for their continuous professional development.
7. Developing IP management expertise as a resource that small businesses can tap on is a key focus in IPOS’ IP Management for SMEs programme. In the last 3 years, 210 SMEs have tapped on this programme for business expansion assistance amounting to SGD 12.3 million in aggregate toward the costs of increased manpower, IP registration and contracting advisory services. Guided by qualified consultants, these companies developed IP strategies to sharpen their business edge and competitiveness. They also received practical assistance in the IP Management journey, particularly in the protection and value-extraction from their IP, including brand-building, franchising, etc.
8. I have with me, quotes from the companies that have gone through the programme. The owner of this traditional restaurant recognised that:
‘Successful businesses are not just about sound management…key elements contributing to the success need to be identified, explored and protected. The IPM exercise highlighted to me this importance, which I have believe has been taken lightly in many businesses.’
The reason for the restaurant’s popularity lies in the management’s commitment to deliver the same familiar flavour that customers expect from their favourite dishes which they had grew up savouring over the decades. A franchise system was eventually developed to help the business scale. Through the programme, the restaurant’s business model is strengthened and made sustainable with the protection of its recipe, brand and trade marks. We can expect more outlets serving up this restaurant’s signature dishes in the near future.
Another trend setting SME that tailors its designs to customers’ needs continues to extend the distribution of its fashion business overseas, leveraging on a new brand identity and flexible partnership models developed under the programme’s assistance. I quote
‘I guess most SME businesses understand the value of branding. But there is more to branding and this programme has helped our company see where our other available IPs and strategic options are’
These companies have reaped rewards through their IPM journey. Dr Srinivas Reddy’s session on managing brand value in the face of rapid changes will provide important insights on sustaining the foundation that these companies have embarked on.
9. My key observation from assessing the current IPM practices of our local SMEs are that most of them will do better if they can understand and make their IP assets better serve their strategic business needs. As the management adage goes, “you cannot manage what you do not measure”. As one of the judges at the Singapore Prestige Brand Award last year, I have often posed these questions: How do you know if your brand is working for your company? How would you know whether it is performing or not? Again I will ask the brand owners present here today. What is the value of your brand? Will lowering the expenditure in one aspect of your business dilute the strength of its brand? Will investment in another lifts the brand’s value?
10. So I am delighted that Mr David Haigh will be speaking about the new ISO brand valuation standards and how it will impact us. This is exciting development because a brand valuation standard will provide clearer benchmarks on valuation issues, considerable predictability for attracting investments or M&A negotiations and a consistent basis for making ongoing asset management decisions.
11. Beyond these reasons for appraising brand value, there will be motivations to do more, based on current developments. According to the World Intellectual Property Organisation, global commerce in the emerging IP asset class, of which Brands and trade marks are part of, is worth an estimated US$300 billion worldwide annually.
12. Asset based lending is another area that has received attention in many economies. For example, major banks in Guangzhou, China have started on designing management and operating rules for IP-based loan. Another five banks in Hong Kong have pledged to offer better terms such as lower interest rates to companies that have completed an intellectual capital management consultancy programme offered by the Hong Kong IP Department.
13. However, the financial potential of IP assets is still limited by current systems and policies that lean towards tangible assets. Though related aspects of Intellectual property laws, secured finance laws, valuation standards and accounting rules have yet to converge in this area, an ISO standard in brand valuation certainly brings us a step closer to accepting IP and brands as collaterals for loans.
14. Finally, I look forward to the illuminating talks and presentations that will ensue in the course of today. Let me conclude by congratulating Brand Finance and the Centre of Marketing Excellence of Singapore Management University on organising a successful Brand Finance Asia-Pacific Forum. I wish one and all a fruitful and productive Forum.
15. Thank you.