Daren Tang: ‘Intangible assets as collateral for business loans’

So what should we do?

These factors make lenders reluctant to recognise the full value of intangible assets. We are therefore helping them to better understand intellectual property, building local expertise in valuation, and supporting practical initiatives that enable lenders to gain experience in loans secured by intellectual property.

Are there any examples that demonstrate the feasibility of this model?

In the UK, a pilot scheme was launched a couple of years ago by NatWest, one of the British banks. Since its launch, it has granted over 20 loans using intellectual property as collateral. The opportunities in this field are considerable, particularly for an economy such as Italy’s. We are working on this with Confindustria. The challenge is not to create more valuable intellectual property, but to make the value that already exists more visible and usable in the financial markets.

What should we ask European governments to do to help innovative businesses grow?

The most important thing is to create financing instruments – in the form of both venture capital and debt – that enable good ideas to be funded and to grow entirely within Europe. Otherwise, European innovators will look elsewhere in the world to find the funding they need to grow.

What are your impressions following your meetings with Italian institutions?

Sometimes Italians are too pessimistic about the future. You have been innovating for hundreds of years. You already have very solid foundations. The modern intellectual property system was established in Venice in 1474. Now you need to ensure that you pay attention to intellectual property and innovation policies, and that these also become an explicit part of public policy.

WIPO data show that Italia is one of the few advanced economies in which, over the last decade, investment in tangible assets has grown faster than investment in intangible assets. Is this a warning sign for competitiveness?

I would regard this as a trend worth keeping an eye on. In Italia, investment in tangible assets accounts for around 15 per cent of GDP, whilst investment in intangible assets is only around 9 per cent. Furthermore, over the last decade, investment in tangible assets has grown more rapidly: by 5.2 per cent per year in real terms, compared with 3.6 per cent for investment in intangible assets. Sweden provides a useful point of comparison: there too, investment in tangible assets accounts for around 15 per cent of GDP, but investment in intangible assets stands at 17.4 per cent. There is no automatic link between higher investment in intangible assets and faster economic growth, particularly in the short term. But the positive signs are clear.

On artificial intelligence: the US, Europe and China are developing different approaches to AI and copyright. How serious is the risk of ending up with a fragmented global system where the use of protected content is lawful in one country but unlawful in another?

The risk is real, but differences between national laws are nothing new. When it comes to AI and copyright, we need to make progress on two fronts. Member States must continue their dialogue on policies and regulations, whilst creators, rights holders and AI developers must build the practical tools and standards that will enable different systems to be interoperable.