The Hidden Economics of Dormant Intellectual Property

When policymakers discuss innovation, attention naturally gravitates toward breakthrough technologies, high-growth startups and headline-grabbing investment rounds. Far less attention is paid to intellectual property that never reaches the market. Yet in universities, research institutes and corporate portfolios across Europe, dormant intellectual property may represent one of the continent's largest and least understood economic assets.

Not every patent is intended to become a company. Not every research project is meant to generate commercial returns. Universities exist to educate, advance knowledge and contribute to society in ways that extend far beyond economic activity alone.

Yet as governments increasingly focus on innovation-driven growth, an important question has emerged at the intersection of research policy and competitiveness. How much value remains locked inside intellectual property that never reaches commercialization?

It is a deceptively simple question. Most discussions about innovation focus on successes. We analyse startups that secure venture funding, technologies that achieve market adoption and research projects that evolve into globally recognised businesses. We celebrate spin-outs, licensing agreements and entrepreneurial researchers.

Far less attention is given to the opportunities that never make it that far. Not because they failed. But because they never truly entered the commercialization process in the first place.

An Invisible Asset Class

Europe generates an enormous amount of intellectual property. Universities file patents, publish research, establish collaborative projects with industry and create new knowledge at a remarkable scale. Research organisations maintain portfolios containing technologies that span everything from healthcare and materials science to energy systems and digital technologies.

Viewed collectively, these portfolios represent an extraordinary concentration of intellectual capital.

Yet only a relatively small proportion of intellectual property assets generate significant commercial outcomes. This is not necessarily surprising. Most inventions will never become billion-euro companies. Many solve narrow technical problems. Others serve highly specialised markets. Some are overtaken by competing solutions before commercialization efforts begin.

The more interesting observation is that institutions often struggle to determine which opportunities deserve additional attention.

This challenge becomes increasingly significant as research portfolios grow. A technology transfer office may oversee hundreds of active cases. A large research university may produce thousands of research outputs annually. Evaluating every opportunity in depth quickly becomes impractical.

As a result, institutions inevitably prioritise. The economic consequences of those decisions are rarely visible.

The Opportunity Behind the Numbers

Recent research suggests the aggregate impact may be far greater than many assume.

The Redstone University Index, which examined entrepreneurial performance across more than 900 European institutions, estimated that improvements in commercialization efficiency could generate more than 327,000 additional startups across Europe over the next decade, contributing trillions of euros in economic value. [1], [2]

The significance of these projections extends beyond startup creation. At their core, they imply that a substantial quantity of valuable knowledge already exists within European institutions but has not yet been translated into economic activity.

This is an important distinction. The study is not primarily describing future discoveries. It is describing unrealized potential attached to existing research capacity.

In other words, part of Europe's innovation challenge may involve extracting more value from knowledge that has already been created.

Why Commercial Potential Is Difficult to Observe

The challenge begins with uncertainty. Unlike physical assets, intellectual property rarely possesses an immediately obvious market value.

A building can be appraised. A machine can be evaluated based on known use cases. Research-based intellectual property behaves differently. Its value depends on context.

A patent that appears commercially insignificant today may become highly valuable if regulations change, a new market emerges, or complementary technologies mature. Conversely, intellectual property that appears promising on paper may never find meaningful adoption.

This uncertainty has always complicated commercialization decisions. Technology transfer professionals must frequently evaluate opportunities while operating with incomplete information. Investors face similar challenges. So do industrial partners seeking technologies that align with strategic needs.

The difficulty is not simply assessing technical quality. The difficulty lies in assessing future relevance.

The Limits of Patent Counts

Historically, many organizations have used patent activity as a proxy for innovation performance.

Patent filings remain important. They provide evidence that potentially valuable knowledge is being protected. Yet patents alone reveal relatively little about commercial outcomes.

A large patent portfolio may indicate research strength. It does not necessarily indicate commercialization strength.

Increasingly, policymakers and universities are beginning to recognise this distinction. The European Commission's work on the European Innovation Act reflects growing concern about the relationship between intellectual property creation and intellectual property exploitation. Among the issues identified by the Commission are the need to improve commercialization pathways, strengthen industry-academia collaboration and increase the use of intellectual property as a foundation for innovation and growth. [3]

The emphasis is subtle but important. The challenge is no longer merely creating intellectual property. It is ensuring that intellectual property creates value.

A Shift in Thinking

This is one reason why conversations around research commercialization are evolving.

Traditionally, intellectual property management focused on protection. The primary objective was securing legal rights.

Today, institutions increasingly find themselves asking additional questions. What market need does this technology address? How large is that market? Who might adopt the technology? What commercial pathways exist? Which opportunities warrant further investment?

The shift reflects a broader change in how innovation is understood. Protection remains necessary. But protection alone is not impact.

From Readiness to Value

The emergence of frameworks such as KTH's Innovation Readiness Level methodology reflects this changing perspective.

By broadening assessment beyond technical maturity, innovation readiness encourages institutions to examine factors such as customer needs, implementation pathways and market conditions. The objective is not simply to determine whether a technology works, but whether conditions exist for adoption to occur.

This represents a meaningful evolution in how intellectual property is evaluated. Rather than treating patents as static assets, it treats them as components within larger innovation systems.

The important question becomes not simply what has been invented, but what can realistically create value. For many institutions, that distinction is becoming increasingly significant.

The Competitiveness Dimension

The debate is no longer confined to universities. Questions surrounding intellectual property commercialization now sit at the centre of broader discussions about productivity, competitiveness and economic growth.

The Draghi competitiveness agenda, the European Innovation Act and numerous national innovation strategies share a common concern: Europe continues to generate scientific excellence but often struggles to capture the full economic benefits associated with that excellence. [3]

Intellectual property occupies a critical position within this discussion. It represents the bridge between research and commercialization. When that bridge functions effectively, discoveries become technologies, companies and industries. When it does not, valuable knowledge remains underutilized.

Rethinking Dormancy

The term "dormant intellectual property" often carries negative connotations. It implies something inactive. Something neglected. Something unsuccessful.

In reality, dormant intellectual property is often better understood as unrealized possibility. Its commercial relevance may not yet be fully understood. The appropriate market may not have emerged. The right partner may not have been identified. The technology may simply reside in a portfolio that lacks sufficient visibility.

This does not guarantee future value. But it does suggest that dormancy and irrelevance are not necessarily the same thing.

As Europe searches for new sources of innovation-driven growth, that distinction becomes increasingly important. The continent's next major opportunity may not emerge solely from future discoveries. Part of it may already exist inside university laboratories, patent portfolios and research archives.

Waiting not for invention. But for recognition.

Sources

1. European Commission, Directorate-General for Research and Innovation. (2025, December 4). Commission concludes public consultation on the European Innovation Act. https://research-and-innovation.ec.europa.eu/news/all-research-and-innovation-news/commission-concludes-public-consultation-european-innovation-act-2025-12-04_en
2. European Commission, Directorate-General for Research and Innovation. (n.d.). European Innovation Act. Retrieved August 7, 2026, from https://research-and-innovation.ec.europa.eu/strategy/support-policy-making/shaping-eu-research-and-innovation-policy/european-innovation-act_en
3. DigitalEurope. (2025, October 3). A European Innovation Act to boost commercialisation and enable growth. https://cdn.digitaleurope.org/uploads/2025/10/DIGITALEUROPE-European-Innovation-Act-to-boost-commercialisation-and-enable-growth-03102025.pdf