“Inventing in the Economic Downturn” – Jane Lambert. Leeds Inventors Group 15 – 10 – 08
Jane decided to take a look at what effects the current economic situation could have on those who are inventing and hoping to get funding or support for their products.
Obviously potential investors are likely to be much more cautious about providing funding when the financial world is particularly unstable. Those who have seen their assets significantly reduced will be much less willing than usual to offer capital. What makes this downturn more difficult is that the government’s support for the banks will mean that there is likely to be much less flexibility in their ability to support new ventures with public money. Inflation and the shrinking economy may mean that funding cuts become necessary. The cost of many materials is also rising.
Anyone putting new products on to the market will always have to compete with existing products, and in difficult times consumers tend to stick with products that they are already familiar with.
Jane pointed out that a growing challenge for European companies and inventors comes from a group of countries he referred to as BRIC (Brazil, Russia, India & China). Jane argued that particularly because they are not dependent on exports they – and China in particular – are continuing to grow. While most Western nations tend to cut research and development work in a recession, some of these countries are continuing to invest in them. It’s predicted that in financial terms China will overtake the US within the next 20 years.
However, this growing market should also be seen as an opportunity – both as a place to sell UK goods but also as a source of investment. Already we are starting to see Chinese investment coming in to the UK. Brazil, China and India are also members of the World Trade Organisation.
Jane then went on to list several famous inventions which were developed during the great depression of the 1930s – such as the jet engine, the electron microscope, frozen food and cats eyes – the point being that economic difficulties needn’t kill innovation.
It’s more important than ever to obtain the best professional advice from recognised organisations - PatLib centres such as Business & Patent Information Services; the Chartered Institute of Patent Attorneys; and the IP Lawyers Association to name a few. As always, beware of invention promoters who offer to protect, promote and sell an inventor’s product for them. She also pointed out that unsolicited approaches to large companies are rarely successful – and sometimes can alert that company to a gap in the market which they can then produce their own product for. Now more than ever companies want proof that a product will sell before they will invest.
Jane stressed how important it is to try to look ahead and see threats to income as early as possible. She advocated the use of adequate intellectual property and other indemnity insurance.
Finally, Jane emphasised how important it is for inventors to make the most of networking opportunities and attending relevant events to keep up to date with current opportunities and making contacts which could give them the breakthrough they are looking for.