One reference I recently found in the US said the value of trade secrets there is $5 trillion, so clearly some have enormous value.
A trade secret is something that's actively treated as confidential and is not known generally in your industry. Things like manufacturing processes, optimal operating conditions and recipes can sometimes be kept a trade secret.
Their advantage over patents is there's no time limit on protection, whereas patent exclusivity expires after 20 years. But keeping a secret for longer than 20 years is very hard. How many staff might discover your secret over 20 years? If they do find out, they might get disgruntled, break protocol or even steal your secret and take it to a competitor.
Also, a trade secret doesn’t stop someone from reverse engineering your technology or recipe. The sole mission of some companies is to help reverse engineer products like software. With most technologies, it won’t be long before someone smart figures out 'the secret sauce' they need to compete with you.
Once your trade secret is out, it's too late to apply for patent protection because the technology will no longer be novel.
Trade secrets must be actively protected by strictly limiting access to the secret - or parts of it - so no one knows the whole picture. You can implement physical and IT security measures to keep your secret safe and ensure equally secure backups. Keep logs of who has access to secret information and when someone has accessed it. Make staff confidentiality agreements robust, enforce restraints of trade and do exit interviews with staff when they leave.
Simon Rowell is a registered patent attorney and the founder of Innovation Liberation Front, an intellectual property commercialisation consultancy.