IMPAC3T IP has published a report into its recent findings of modern drivers for enterprise licensing.
Licensing has traditionally served as a strategic asset for small and medium enterprises (SMEs), providing access to new technologies, expanding market reach, and generating additional revenue. Licensing traditionally helped SMEs avoid the high costs of research and development (R&D), allowing them to quickly leverage proprietary technologies. It also made market entry less risky, using local and established networks, and offered lower costs through outsourcing manufacturing and marketing.
Modern drivers for licensing, however, are reshaping the landscape with new priorities including demonstrating Environmental, Social, and Governance (ESG) criteria to customers and investors, making stronger use of R&D tax credits, complying with governmental procurement approaches and demonstrating social responsibility towards less well-developed economies.
These new approaches are outlined in the report through a series of illustrative case studies:
- A green energy firm that raised $50 million in investment by aligning its licensing strategy with environmental standards, boosting its valuation and securing market credibility.
- A larger company leveraging licensing to extend the R&D tax credit scheme by licensing to a subsidiary, enabling continued technology maturation, further development, and reinvestment—a method applicable to smaller companies.
- A case study on ferry provision, showing how local governmental organisations are embedding procurement terms into licensing agreements, highlighting the growing importance of awareness and compliance with these issues for enterprises.
- A Spanish SME licensing a brain tumor treatment device to African hospitals, addressing local unmet medical needs while securing government grants and partner support. This underscores the need for customised licensing that accounts for training and local regulatory requirements.
The report demonstrates that as the external environment changes and wider issues become increasingly important to governments, investors and consumers, SMEs will need to re-evaluate their approach to licensing. To appeal to ethical investors and partners, it will become crucial to focus on long-term sustainability in licensing and both address ESG issues and showcase the tangible benefits. Engaging with stakeholders, including intermediaries and NGOs, builds valuable support networks that strengthen licensing initiatives. In markets with specific needs, investing in training and capacity building can ensure local partners make the best use of the value of licensed technologies.
By adopting these strategies, SMEs can use licensing as a tool not only for market growth but also for sustainable and ethical engagement in a rapidly evolving market. This approach can equip SMEs with the tools needed to navigate complex licensing landscapes, increase their appeal to investors, secure a competitive advantage and demonstrate tangible benefits for less developed economies.