in Geneva recently for the launch of WIPO's second World
Intellectual Property Report, on "Brands - Reputation
and Image in the Global Marketplace". As I said at the launch,
it's welcome to see some interesting research on the economic
role of brands/trade marks (which, as the report says, have
different meanings - at least in the English language).
The report makes some very useful observations about different
types of brands, including national brands, and also seeks to
put some numbers on their economic contribution.
But what I found particularly interesting in the report and
in the subsequent discussion of it was the third chapter
"Branding, Innovation and Competition". This concluded that
"branding helps firms to appropriate their investments in
innovation" and found that "firms that invest more in
innovation also invest more in branding".
When I read this, I was sceptical - as I expect many
readers are. Surely you protect innovation with patent rights?
Trade secrets might play a role in some industries, and you
could make a case for the role of industrial designs or even
copyright. But trade marks? We associate brands with more
mature industries as FMCG, luxury items and clothing.
But comments by WIPO Chief Economist
Carsten Fink (below, left), who presented the report,
put a slightly different slant on it. He argued that "branding
is one of the most important mechanisms for firms to secure
returns on R&D investments", and reasonably pointed out the
close link between aggressive branding and high-growth tech
industries, such as telecoms and IT - as well as
pharmaceuticals which is, as so often, to some extent a special
Put this way, the
branding-innovation connection makes a lot more sense. Indeed,
if you are launching an entirely new product - say, a
smartphone or a new internet service - then having a memorable
and powerful brand can be essential to create and build the
market. Rankings of the most valuable brands are useful here,
even if (like me) you are sceptical about the methodologies and
the dollar values. In the latest versions of the three main
Brand Finance and
BrandZ), Apple, Google, IBM, Microsoft and Samsung all
feature alongside or even above traditionally strong brands
such as Coca-Cola and McDonald's.
That also explains why we see a lot of advertising and
sponsorship from technology brands, especially in service
industries (internet search/sales and mobile telecoms
providers, for example) where what you're buying is to some
extent invisible. In fact, the more you think about it, the
more the link between branding and innovation makes a lot of
sense. Do readers agree?