Influential Economist is Concerned About AI Capturing Employee-Generated Intangible Assets

The most cited business management and intellectual property value expert says businesses and employees need keep a watchful eye on the use of AI by employers to capture and own work techniques, including subtle interactions, such as how employees approach and maintain successful client relationships.

In a guest column written for The Intangible Investor, David Teece, a leading economist observes, “For decades, management scholars and practitioners have grappled with what I call the ‘knowledge problem’ in organizations—the stubborn difficulty of codifying and transferring expertise that resides in individual employees’ heads and habits.”

AI is Changing the Equation

“Artificial intelligence is fundamentally changing this equation, and the implications for intellectual property strategy are profound.”

Dr. Teece is the author of 30 books and more than 200 articles, and has been cited more than 250,000 times, per Google Scholar, the most of any management expert. He has long been dedicated to the economic and strategic advantages provided by intellectual capital and IP rights.

Perhaps, most importantly, Teece, for more than 50 years a leading educator at UC Berkeley and Stanford business schools, is a successful entrepreneur who founded and sold two consulting firms, LECG (NASDAQ: XPRT) and Berkeley Research Group.

“Machine learning systems can watch how expert employees navigate complex decisions, capture the patterns in their reasoning, and codify what was previously impossible to capture,” notesTeece.

“The senior loan officer’s instinct for creditworthiness, the experienced engineer’s feel for design tradeoffs, the veteran salesperson’s read of customer hesitation — all of this can now be systematized into algorithmic form.”

He believes “Firms that move quickly to implement AI-based knowledge capture will find themselves with defensible competitive positions rooted in codified expertise.”

Employee Agreements

For employees, they may want to rethink those typically ignored “work for hire” clauses in their employment agreements that yield ownership of IP rights, such as trade secrets to their the businesses that hire them. Employees may have little leverage at this point, but they should be aware how their relationship with AI at work could restrict their freedom.

The Screen Actors Guild was early in seeking to protect the use and likeness of its members, many of whom never thought about their look or technique as being capturable. A similar representative body has yet to emerge on behalf of white collar workers or C-level executives.

Read the full Intangible Investor guest column by David Teece in IPWatchdog at the link below.