The news that UK interest rates are to rise significantly, in the face of poor economic prospects for up to two years, means that businesses cannot rely on a "hope for the best" approach to the near-term future.
Managers must look at all possible revenue streams to ride out the coming storm. Existing product sales may come under pressure from skills shortages, rising prices of raw materials, and risk-averse buyers.
In this context, the value of a business comes under scrutiny. It has long been acknowledged that the disparity between the value of balance sheet assets, and the perceived market value of a business, must be explained to large extent by intangible assets - intellectual property, knowledge and goodwill. While revenues from more tangible routes are robust, it is easy for managers to overlook the earning potential from what could be the overwhelming value of the business.
It is thus time for businesses to look at alternative sources of income. This could be from sweating existing IP assets more effectively - through licensing, franchising or even disposal. Or it could be through a more active approach to enforcement, to secure competitive position. But any asset laying dormant in the present circumstances is doing nothing for the business, and may in fact be a cost. IP managers should ensure that they understand what assets are vital for the long term strategy of the business, and what can safely be allowed to lapse to save money.
The temptation will also exist to curtail expenditure on research, development and productisation. However, the road to recovery, while uncertain, depends on having innovative products ready for market. Retaining budgets for focused innovation, while reducing speculative expenditure which could be deferred, is essential.