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Digital revolution: Transfer of technology for next generation
Given these digital revolutions, many households have diversified assets. Land is presently not the sole asset, as many households hold some sort of digital assets
The digital revolution started in the 1980s when there was a transition from the analog to the digital.
Currently we are in the digital or information age, where there is a lot of internet and a lot of digitisations. We are also said to be in the fourth revolution digital age, which is characterised by rapidly evolving technology like artificial intelligence and robotics. A lot of digitised services have become the “new normal.”
There are some who argue we are even beginning to transition to a post digital age, where digitisation will become a normal way of life that will engrain itself deep into day-to-day life.
Given these digital revolutions, many households have diversified assets. Land is presently not the sole asset, as many households hold some sort of digital assets. This is especially if the family has a member who is in the technology and digital space.
The information age is not only about technology, there is a lot of other information like technical know how that can be held by a family. Some skills like cooking, music and so on, are skills which are peculiar in some cultures and families.
A lot of Italian restaurants derive their competitive advantage from a technical know how skill handed down the generations. I watched a movie, where the restaurateur preserved an ancient family cooking recipe and won an award based on the recipe.
An investor came into the business and sought to overhaul the menu, an initiative the restaurateur fought against so as to preserve the family technical know-how.
Before the digital revolution, the former ages were all about land and capital. Family wealth was centred on land. It is still a reality in modern days, where families that hold land have a high net worth.
However, it is time to start considering diversification of family wealth by considering digital assets. After all, the world is moving in that direction.
Many global tech giants started out with very humble beginnings. Both Apple and Facebook began almost 2o years ago and have grown in size to be what they are today.
I know a certain old man who is very forward thinking and inspired me to write this article. He has seen the value of investing in digital ventures. While he is not tech-savvy, he has incorporated a tech subsidiary of his family holding companies.
He has employed developers to develop next-gen tech solutions. Through the subsidiary he has also invested in a lot of software. The reason he does this, is to secure the future of his descendants by investing in what he feels is the next frontier.
I have a few tips for like minded individuals. It starts with the founder. To diversify into tech as a family asset you may or may not be a tech expert. If you are tech savvy and can develop some tech solutions then all the better. However, if you are not tech savvy you can like the old man above, invest in tech solutions.
Once you have a developed solution, then secure intellectual property rights for it. It is worthwhile to do as much material disclosure of your solutions as possible, in a way that others can learn and use the solutions even in your absence.
Form a family trust company with your beneficiaries as owners. You can prepare an assignment of intellectual property and technology transfer agreement to the family trust.
This ensures that in the event you are deceased, your family owns the technology and it also holds the technical know how associated with the technology.
Ms Mputhia is founder of C Mputhia Advocates. Email: [email protected]
