Infocapitalism:
"Advanced capitalism needs to destroy all vestiges of tradition, all orthodox ideologies, all continuous and stable forms of reality in order to stimulate higher levels of consumption"

Maximizing Infocapital:
Successful Business Development in the Information Age

BY RAVI C. GUPTA

What is "Infocapital?" Infocapital is the original or unique understanding developed by a person or company about its business. It can be the result of scientific research or business experience. IC relates to special information about a market, product technology, process or industry, and should be managed as one of the company's most valuable assets. Effective Infocapital Management can significantly improve a company's competitive leadership and tremendously increase its shareholder wealth. Previously known as Intellectual Assets or legally, as Intellectual Property, Infocapital can be tangible, intangible or a combination of both.
As the Information Age enters the 21st century, Infocapital Management has more significance than ever. America has become an information-based economy: six-year-olds use CD-ROMs with ease; retirees are the fastest-growing group of Internet users; and more and more American exports are information-based products. Management of information can be key to a company's long-term success.

This need for highly effective information management cuts across all industries. The healthcare, telecommunications, entertainment, new media and software fields are all finding their success directly linked to successful Infocapital Management. It is an increasingly important yardstick by which they are measured against their competition.

A good example is IBM's Infocapital Management strategy for its personal computer. Due to IBM's "open-architecture" approach, which led to widespread imitation and "cloning," its PC is now the global standard. Apple, which opted for a "closed architecture" approach, is still evolving.

Another example is the genomics industry (genetic science-based R&D). Many of its leading companies were initially struggling to survive until they changed their business-focused and Infocapital Management strategy to more open alliances with competitors. The results enabled them to create mutually profitable joint ventures with the large pharmaceutical companies instead of remaining their under-financed also-rans.

Many successful companies have mastered effective Infocapital Management to become market leaders. For years, Johnson & Johnson, Chiron, Microsoft and Netscape have carefully managed information surrounding their brands, products, trademarks and processes, treating Infocapital as a scarce and valuable asset. The Coca-Cola Company has selectively expanded the use of its trademark "Coke" to a range of other industries such as garments, toys, and leisure luggage, resulting in enormous increases in shareholder value.

Effective Infocapital Management can
significantly improve a company's competitive leadership
and tremendously increase its shareholder wealth.

A Company-Wide Integrated Strategy
In many industries, effective Infocapital Management has proven key to sustained, profitable growth. A company's Infocapital Management strategy must complement its overall corporate strategy, and must include continuous interaction and close coordination between each departmental and functional level.

Increasingly, a company's Infocapital Management strategy will involve employees at all levels as dealing with information becomes a larger part of most jobs. More and more employees will be able to identify new growth and business development opportunities with customers, suppliers and partners.

Increasingly, a company's Infocapital Management strategy involves employees at all levels.

A Fundamental Skill
Better Infocapital Management can help managers increase shareholder value by maximizing profit-earning opportunities. It's been said that good Infocapital Management is a little like being a jockey: once you know how to ride, you can handle different horses on different courses. This same skill is necessary in managing business development for different technologies in different industries.

Very few new businesses fulfill their mission within original funding and time frame expectations. Strategic Infocapital Management can help managers who must steer their businesses through increasingly changeable, fragmented or integrated industries and markets.
"Do anything to get the business." This is a phrase most businesspersons have heard from their managers. But Elton Dry, professor at the University of Houston and Infocapital Management specialist cautions, "Offering special deals with one customer--technically called a 'most-favored-nation' deal--can be tricky, and therefore, wording of the agreement is extremely important." It is critical to have a viable Infocapital Management strategy as part of the agreement--to identify desired results, or ways to improve shareholder value."


New Business Development
If the essentials for a home purchase are "location, location, location," then those for developing effective Infocapital Management are "preparation, preparation, preparation." Persistence, perseverance and patience are necessary as well. Richard Razgaitis, Vice President of Technology Commercialization at Bellcore explains, "The opportunity to create business value is extraordinary in these turbulent times. The objective is to create marketable and profitable new products, not to be an invention factory. There are opportunities to be had just by changing one's business model." This can be especially true in new research, when market applications are not always obvious.

The scarcity and value of a company's Infocapital can best be explained by a simple analogy to an apple tree. If anyone could pick the tree's fruit it would have no business value (technology must be protected in order to maintain its value). In addition, apples have value only as long as they are fresh (technology is perishable). Therefore, the fruit must be protected and the tree's value maximized before the apples rot and new apples appear on the same tree (next generation of technology appears), or another variety of apples or a new type of fruit goes on the market (analogous to a new technology such as the Internet--"new" fruit--taking customers away from television--"old" apples).

Traditionally, companies have protected their Infocapital through patents, copyrights, trademarks and trade secrets. Now, new protection software is especially important for electronic commerce. As the Internet makes new information available more quickly to more people, and the rate of technology development continues to accelerate, all of these methods for protecting Infocapital become more important. An example of good Infocapital Management and its protection is at the Xerox Corporation. Xerox owes much of its continued leadership to senior specialists who have carefully protected the company's name, technologies and trademark. Xerox's overall Infocapital Management is an integrated, multi-disciplined collaborative effort combining R&D, marketing and business strategy with the legal department.


Developmental Stages
Business development strategies and objectives for Infocapital Management depend on the stage of development for the market and the technology. Markets develop in seven stages, and a company's Infocapital Management goals should be consistent with these stages.
Similarly to market development, there are multiple stages of technology development. From basic science to marketable products, the stages are different in different industries. As with the marketing stages, Infocapital Management strategy and execution must be consistent with technology stages. Employees in all functions will help to create the company's Infocapital.


Infocapital Management in The Global Marketplace
As the tidal wave of globalization continues, it is essential that U.S. businesses familiarize themselves with other countries' business practices, laws, regulations and cultural protocols. Cross-cultural understanding in these areas is vital to success in this age of continuous innovation and worldwide communication. As Jay Simon of Exxon Research Corporation points out, "In general, it is acceptable to set manufacturing limits in a license agreement, but in the European Union one cannot mention anything about maximum limits." In-depth understanding of crucial points such as this is key when formulating and executing winning Infocapital Management strategies. This can affect everything from selecting performance measures to structuring bonus plans and ensuring the validity of the agreement.

In sum, successful Infocapital Management and business development in a global environment requires:

• Understanding the changing nature of business.
  
• Identifying growth opportunities in different industries.
  
• Building close cross-cultural relationships.
  

In the 21st century, companies that excel in these skills will succeed in business development, maximize shareholder value and become industry leaders.


The Results of Successfully Managing Infocapital

Adapted from A.T. Kearney