WIPO’s 2013 World IP Report
(WIPR), released last Thursday, focuses on branding in the
global marketplace. The 139-page report examines this issue
from a number of angles, but a particularly interesting aspect
traces advertising spending as well as R&D expenditures as
a percentage of GDP in countries around the world and how these
figures are shifting historically.
The WIPR notes that global spending on advertising is
equivalent to about one-third of R&D spending. However,
high-income nations (defined as those with gross national
income per capita of $12,476 or more), follow a slightly
different pattern. In the US for example, advertising has
historically been a higher percentage of GDP than R&D.
Research and development has increased fairly steadily over
time, with advertising spending undulating but trending
downward. According to the report, in 2010, advertising and
R&D each accounted for slightly less than 2.0% of GDP.
China is trending differently. The WIPR shows that spending
on advertising has hovered near 0.4% of GDP since around 1977.
However, R&D expenditures as a proportion of GDP have risen
rapidly during that same time, from just below 0.8% to
approximately 1.3% in 2010. When you combine this with the
growth in the country’s GDP over this time, the
increase is even more impressive.
Building innovation requires more than just spending money,
of course, and there are still concerns about
China’s IP environment. Still, there is also
increasing interest among international
companies in China as an attractive location for research and
By contrast, many Chinese consumers still value
international brands over domestic ones. For example, stories
exist of where wearing sports apparel from a Chinese company
may be grounds for humiliation if others are wearing Nike
(registration required). This may be a reflection of the
relative lack of spending on brand development by Chinese trade
mark owners. Internationally, the story is much the same, with
China being underrepresented in most rankings
of the world’s top brands.
Of course, the much-discussed National IP Strategy does not
just seek to make China a leader in scientific research; one of
its aims is the creation of world-renown brands. The jury is
still out on whether the National IP Strategy will succeed at
all, but the WIPR report shows that at least in the area of
scientific innovation, companies doing business in China are
indeed dedicating more and more resources toward achieving that
WIPO’s 2013 World IP Report can be found here.