Intangible Assets Measuring and Enhancing Their Contribution to Corporate Value and Economic Growth (2009) / Chapter Skim
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6 Intangibles and Government Policy
6 Intangibles and Government Policy
Pages 85-99
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From page 85... ...
6.1. INTANGIBLES AND INTELLECTUAL CAPITAL FROM A COMMUNITY PERSPECTIVE Ahmed Bounfour provided information that is the basis of an ongoing World Bank Conference on Intellectual Capital for Communities.
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From page 86... ...
Aspects of intangibles and intellectual capital provide levers for reviving communities' policies and strategies. Bounfour provided responses to the question: What makes people really want to invest in the intellectual capital of a nation or a city, and what makes a community different from companies?
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From page 87... ...
. The underlying notion of something like the Louvre Abu Dhabi Agreement is that the public sector owns intangible assets that should be valued.
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From page 88... ...
Bounfour noted that research projects are underway throughout Eurpoe that aim to promote a better understanding of the impact of intangibles on economic growth at national, regional, and corporate levels; or that are designed to introduce standards for the management of intellectual capital as a means of achieving business success. The Japanese Experience Turning to activities in Asia, Bounfour expressed the view that Japan has the most structured program for dealing with intangibles -- particularly intellec tual asset–based management -- with actions at the corporate, regional, and city levels.
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From page 89... ...
. Bounfour also raised the issue of brain drain or diaspora as a way of circu lating intellectual assets among nations.
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From page 90... ...
6.2. INTELLECTUAL ASSETS AND VALUE CREATION Douglas Lippoldt explained why developed countries are addressing intellectual assets through the work of the OECD secretariat.1 There are a number of reasons: first, there is growing recognition that intellectual assets are central to value creation, economic growth, competitiveness, and a modern economy.
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From page 91... ...
Lippoldt stated that this will be an area of continued interest to be developed more fully. Much of Lippoldt's presentation focused on a recent interim OECD synthesis report, Intellectual Assets and Value Creation (Bismuth, 2006)
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From page 92... ...
. Policies that engage ICT, human capital, innovation and entrepreneurship in the growth process, alongside fundamental policies to con trol inflation and instill competition while controlling public finances are likely to bear the most fruit over the longer term" (February 2007 OECD Policy Brief, "Creating Value from Intellectual Assets," p.
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From page 93... ...
Lippoldt turned next to the topic of corporate reporting and inadequate dis closure of intellectual assets. Examination by the OECD fiscal affairs department has led to the conclusion that current practices are often backward-looking and provide inadequate information about capacity to generate future revenue from intellectual assets.
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From page 94... ...
Lippoldt reiterated the point made by other presenters that government policy can be used to support better measurement. It can influence some of the drivers of intellectual assets and value creation.
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From page 95... ...
3.0 TOTAL 204.4 NOTES: Does not include tax expenditures or value of landing slots, grazing rights, water rights, mining rights, spectrum and broadcast licenses, etc. CBO = Congressional Budget Office, EDA = Economic and Development Administration, GAO = U.S.
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From page 96... ...
Jarboe observed that the idea of a safe harbor has been around for at least 20 years for intangibles. Next, Jarboe raised the idea of modifying the Sarbanes-Oxley Act -- also known as the Public Company Accounting Reform and Investor Protection Act of 2002, passed in response to a number of major corporate accounting scandals -- so that a clear directive is created for assessing material intangible assets.
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From page 97... ...
Next, Jarboe moved on to his list of policy measures to encourage financial investment in intangibles. For starters, he suggested creating a central national registry of intellectual property security interests.
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From page 98... ...
Another policy lever for increasing the use of intangible assets is to explore lowering the tax rate on royalties derived from them; this should be done in conjunction with stricter regulations on international transfer pricing mechanisms and cost-sharing arrangements and on passive investment companies that can be used as tax havens. Landefeld raised this issue, in the measurement context, of how location of intangibles can be attributed to tax havens.
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From page 99... ...
Also, a review of how the federal tech nology transfer system, including the Bayh-Dole Act, does or does not facilitate the creation of intangible assets may be in order. Finally, there is a whole series of federal government business loan programs to review, especially in the small business arena, to ensure that intangible assets can be used as collateral.
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