(XIII) Companies don't survive- do patents?

I have started a discussion on this site about valuation of patents - and oppose econometric models, which assume extrapolation from past to future - without disruption. One condition for such assumptions would be stability over time - that products, markets, technologies are relatively stable. Now, more than ever, nothing is stable, however. To me the consequence is that it makes no sense to extrapolate more than 5 years, let alone 17 years, the lifetime of a patent. I'd even dare the statement that this trend undermines the logic of patenting!

I just made a sample of the Fortune 100 of Danish companies (www.borsen.dk has the list) and compared FY 2004 with FY 2001. 43 of FY 2001 companies are not on the FY 2004 list, as they have been acquired, merged, disappeared (sic!) etc.

The Global Entrepreneurship Monitor and similar Danish surveys show that the average lifetime of a DK company is now 5 years. ifferent innovation surveys show that the lifetime of a product or market is less than that.

This trend was pointed out 20 years ago by management guru Tom Peters, eg. in his  book Liberation Management, or Dee Hock's "Chaordic Age" books (amazon.com would have them).

Check out British Telecom's futurologist, Ian Pearson, and his amazing book Business 2010 http://www.icnet.dk/amazonpearson or his web site http://www.btplc.com/Innovation/News/timeline/index.htm , which gives an eye-opening view of the future. 

Comments

[Andrés Alba]

I found a very interesting recent post in a popular blog about the relative importance of patents nowadays —particularly for startups.

http://blog.guykawasaki.com/2006/11/counterpoint_pa.html

[Max]

Guy Kawasaki is the old Mac Evangelist. He was my hero back in the 1980s. Then he made a fortune (?) on a database software called 4th Dimension, if I remember well.

Kawasaki's point about patents is right on the spot.