Technology Valuation Essay

2078 Words Jul 1st, 2013 9 Pages
GUIDE ON VALUATION OF TECHNOLOGY

Guide on Valuation of Technology

TABLE OF CONTENTS

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INTRODUCTION 1.1 1.2 1.3 1.4 DEFINITION OF TECHNOLOGY ROLE OF TECHNOLOGY OPEN INNOVATION STRATEGIC ALLIANCES

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VALUATION OF TECHNOLOGY

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VALUATION METHODS 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 TWENTY-FIVE PERCENT (25%) RULE INCOME TECHNIQUE MARKET APPROACH COST METHOD RELIEF FROM ROYALTY TECHNOLOGY FACTOR APPROACH CAPITALIZATION APPROACH REAL OPTIONS METHOD

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RISKS FACTORS AFFERCTING VALUATION OF TECHNOLOGY/ IP 4.1 4.2 INTERNAL FACTORS EXTERNAL FACTORS

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APPENDIX  WORKED EXAMPLES

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Guide on Valuation of Technology

GUIDE ON VALUATION OF
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1.3 Open Innovation With limited and diminishing resources available to any country, it makes sense to benefit from each other’s strength and competency through technology acquisition, transfer or offset programmes. With the globalization process under WTO and the opening up of world markets, there will be increasing inter-dependence between

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Guide on Valuation of Technology

global trade and technology for the continued prosperity of a company or country. Under the concept of open innovation, it is often said that companies that don’t innovate risk stagnation and will eventually die. Competitive advantage now comes from leveraging on the discoveries or technology of others. Rather than relying entirely wholly on internally generated ideas to advance business, an “open” approach to innovation often balance between internal and external sources for ideas and technology. Rather than restricting innovations to a single path to market, open innovation encourages companies and countries to find the most appropriate business model to acquire or share an idea or technology through technology acquisition, transfer or offset programmes.

1.4 Strategic Alliances Whether the right business model exists within a company or must be sought through

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