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Writer's pictureThe Sifre Group

The Importance of IP to SMEs in the Knowledge Economy

Updated: Oct 12, 2022


For Small and Medium-Sized Enterprises (SMEs) in the knowledge economy (whether in the creative industries, science and technology, or software development), intangible assets are their most important business assets. SMEs in these sectors make significant investments in R&D, product creation, differentiation, and marketing. Intellectual property (IP) enables SMEs to have exclusivity over the exploitation of their innovative products, creative works, and their brands, thus creating an incentive for investing in them.


If an SME has developed an innovative product or process, the SME may patent the invention and commercialize it, or license it to somebody else who will commercialize it. The SME may also keep the invention secret and commercialize the product. SMEs in the creative industries like music and film, software, video games, and multimedia can benefit from copyright protection. Branding of all products and services can be protected with trademarks and service marks.


Adequate IP protection enhances the value of the company through effective IP asset valuation and management, which facilitates access to venture capital and other sources of financing.


Did you know that the licensing of intangible assets is an exempted activity under the Puerto Rico Incentives Code? Did you know that investments in R&D and in the creation of audiovisual works can generate tax credits under the Puerto Rico Incentives Code?

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