Observer: Stronger Regulations Key to Optimising IP-Based Financing
Jakarta (ANTARA) - Heru Sutadi, a digital economy observer from the University of Indonesia, said stronger regulations and a more robust implementation ecosystem were essential to optimising intellectual property (IP) as a source of financing for creative economy players in Indonesia.
Heru said the government needed to align regulations across the financial sector, establish workable standards for valuing intellectual property, and clarify how IP could be enforced if a borrower defaulted.
“The government needs to align financial sector regulations, establish applicable valuation standards and clarify how IP can be enforced if a borrower defaults. A secondary market should also be developed so that pledged IP can potentially be sold or transferred,” Heru told ANTARA in Jakarta on Monday.
He said clear valuation standards were important because the value of intellectual property was not always easy to determine. The value of a creative work or product could be affected by its income potential, market prospects, popularity and the sustainability of its commercial use.
This means IP valuations need to be supported by accountable and consistently applied methodologies. Financial institutions would then be better able to measure financing risks, while creative economy players would gain a clearer picture of the potential value of their assets.
The process for resolving defaults also needs to be clarified. Certainty about how pledged IP can be enforced, transferred or sold is necessary to ensure the asset has realisable economic value and is not merely listed as collateral on paper.
Heru urged the government to begin implementing the scheme through pilot projects involving banks, financing institutions, asset valuers and creative economy players. A measured risk-guarantee scheme could also be considered to build financial institutions’ confidence in IP-based financing.
“This would give banks certainty, while enabling creators to access broader and more responsible financing,” he said.
Heru also cautioned that expanding access to finance must go hand in hand with protecting ownership and the strategic value of local intellectual property. IP-based financing, he said, should help creators develop their work and businesses without disregarding the potential for their assets to be controlled over the long term.
He said financing schemes should be designed so that creators did not lose control of strategic assets simply because they needed business capital. Understanding the implications of financing agreements, the arrangements governing IP rights and the mechanisms for settling obligations are therefore important parts of responsible financing governance.
“Indonesia must not be rich in creativity but poor in access to finance. Local intellectual property must become an economic asset that helps creators grow, not merely a certificate,” he said.
Heru also stressed the importance of ensuring that the economic value generated by local works and innovation continued to benefit creators and the national economy. The success of IP-based financing, he said, should not be measured solely by the amount of funding disbursed, but also by whether the scheme strengthens creative businesses and retains added value domestically.
If certainty over valuation, collateral enforcement mechanisms and the development of a secondary market can be secured, intellectual property could become a sustainable financing instrument that meets creative players’ capital needs while enabling financial institutions to manage risk and strengthening the competitiveness of Indonesia’s creative industry.