517. The United Kingdom would like to thank Switzerland for their interesting and informative paper on IP financing for start-ups. We also thank Members for helpful information shared so far. The United Kingdom believes that businesses' ability to access the right type of finance at each stage of development is critical to allowing innovators to develop their ideas and enabling businesses to grow.
518. Innovation is a key driver of economic growth, and finances affect every stage of the innovation cycle: from idea creation to commercialisation, expansion, and long-term business sustainability. Businesses' innovation finance journeys typically involve progression from the founder's own resources, grant funding, seed equity and later venture, institutional capital, and ultimately debt finance.
519. However, IP-rich companies with substantial intangible assets can find it difficult to secure debt finance. A key challenge for innovative businesses is the financial services sector's understanding of the role that IP plays in generating cashflow. To address this challenge, since 2018 the UK has been working and engaging with banks, lenders, investors, accountants, and insurers to:
a. Explore the challenges faced by the financial sector and businesses in using IP as a collateral for lending;
b. Explore the barriers financial institutions face in recognising IP as an asset, and how businesses can use their IP as leverage to access finance.
520. We also want innovative, IP intensive businesses to understand how to use their IP to gain access to funding.
521. To improve awareness amongst start-up businesses of how IP can be used to unlock access to finance, the UK offers a range of resources to help new businesses understand and identify their IP and incorporate it into their business planning. For example, the 'IP for Investment' digital toolkit was developed to prepare IP-rich businesses looking for equity finance to grow. The toolkit helps them to identify and assess their IP assets as part of their overall business strategy and provides guidance on their investor readiness.
522. The UK also offers a range of other digital resources to help businesses with managing, using and commercialising their IP. This includes the IP health check diagnostic tool kit for businesses to undertake an initial audit of their IP assets to identify how to maximise their value, and the Business Lifecycle Framework, which provides information aimed at pre-start-up and startup businesses, such as how IP assets can be used for seeking finance. As a part of our commitment to improving understanding of IP, the UK is developing a specialist module on IP valuation as part of its IP awareness and education work. This will set out some of the key methods for IP valuation, sitting alongside a broader package of education resources on topics such as IP management, IP commercialisation, and IP in contracts, to improve understanding of the value of IP assets.
523. The United Kingdom has also worked with regional business services on IP and access to finance, as well as working with financial institutions directly. For example, by including IP within regional programmes aimed at supporting early-stage SMEs acquiring equity finance and working with finance providers to ensure they direct businesses to relevant IP information and support.
524. Financial support is also available to SMEs to help them to better manage, protect and commercialise their IP. The IP Audit scheme provides eligible, innovative high-growth potential businesses with funding towards an audit carried out by an IP professional. This in-depth analysis of the business's IP helps new businesses to identify how they can make their IP work for them as they grow, so they can unlock the value of their IP. Funding is also available to businesses to implement the recommendations in their audit report - such as engaging professional services to support IP management and commercialisation, including IP insurance and valuation of IP. I hope this information has illustrated how the United Kingdom sees IP as a way of unlocking finance for startups, and our commitment to ensuring that it can be fully used by such businesses.
