National Seminar on Intellectual Property and its Impact on Economic Development

1
National Seminar on Intellectual Property and
its Impact on Economic Development
The Role of Intellectual Property in Promoting
International Trade and Facilitating Investment
Minsk November 24 and 25, 2004
2
IPRs IN THE WORLD ECONOMY

• Globalization of world economy and liberalization
  of trade and investment
• Increase in bilateral and multilateral trade and
  investment agreements
• Increasing costs of R D
• Emergence of a knowledge based economy
• Expansion of trade and change in composition

3
Composition of World Trade(percentages)
4
Worldwide Patent Filing - Trends (000 )

5
The New Imperative

• Not merely to preserve market exclusivity but to
  build strategic partnerships
• IP assets - investment, not business costs
• Maintain and audit portfolio to
• maximize return on investment at least risk
• access technology and markets
• promote trade and
• enhance competitiveness

6
Economic Growth and Technology
Ideal Growth Path
GDP
High GDPHigh ST
High GDPLow ST
Low GDPLow ST
Low GDPHigh ST
ST
Country
7
Growth Competitiveness Index
Core Non-Core
Three Variables

25 25 50
33 33 33
1. Public Institutions Protection of
rights Resolution of disputes Efficiency /
transparency
2. Macro Economic Environment Monetary and
fiscal policies

3. Technology Without tech progress can
accumulate capital but not sustainable growth
8
How is Technology Obtained

• Core Innovation
• Technological Diffusion

9
R D Expenditures
Industrialized Countries US 583
billion Developing Countries US 57
billion

10
Technological Diffusion

• Rapid growth if successful in adopting/adapting
  foreign technologies
• FDI - effective way of technology transfer and
  facilitated by the domestic environment
• Size of the market
• Stability of macro economic policies
• Free repatriation of profits and dividends
• Guarantees against nationalization
• Protection of Intellectual Property Rights

11
Survey - Protection of IPRs and Decisions on FDI
By type of Industry
By type of Investment
12
Chemicals IndustryResponse for making
investments in manufacturing and RD facilities

13
Patents and Technological Development

• Facilitate trade and investment
• Disseminate initial knowledge as free input
  (public good) to produce further knowledge as
  output (private good)
• Limit free riders not innovators
• Encourage licensing arrangements
• Catalyze new technologies and businesses
• Ex Cuba

14
(No Transcript)
15
Importance of Trademarks

• Marketing strategy - differentiate products from
  those of rivals and develop longer-term/emotional
  relationships with customers
• Attempt to move customers from
• brand awareness, via
• brand recognition, to
• brand preference, and finally to
• brand insistence

16
Marks, Economic Value and Trade

• Increase sales volumes and price
• Stabilize demand through consumer relationships
• Earn royalties - licensing and franchising
• Transfer brand equity to new product categories

17
Value of Mark in Total Value of Firm
18
Brand Values ( US billion)
19
Contribution of CR Industry

• Core industry
• creation of products or works
• Industries partly covered by CR
• manufacturing, business practices
• Distribution
• transport, bookshops, record stores
• CR related industry
• production and tech assistance with equipment-
  computers, radios, TV

20
Share in Development

• US
• 5 of GDP
• 3.24 of employment
• MERCOSUR
• 6 of GDP
• 4 of employment

21
World Music Sales

• Sales Drop
• Germany - 20
• France - 14
• BE, DK, GR,
• IE, PT, SE, CH gt10
• Cuts in jobs and marketing expenditures,
  winnowing repertoires of poorly selling artists

• Peer-to-peer file sharing
• 7.4 m daily users
• download 410 m files per day as against legit
  sales of 5 m units

22
China Software Industry

• Projections
• 3600m in sales
• 6200m in economic activity
• 590m in tax
• 104,000 jobs

• 480m in sales
• 820m in economic activity
• 80m in tax
• 13,000 jobs

10 decrease in piracy
23
Thank you