We live in a world of innovation haves and have nots. A relatively small group of nations produces the vast majority of paradigm-changing technological innovations and related products. Meanwhile, the rest of the world tends to characterise itself as net consumers of innovation.
These characterisations foster policy mindsets that lock countries into their respective positions: a country that considers itself an innovative producer will tend to favour stronger IP rights in order to further stimulate innovation at home and safeguard its assets overseas; a net consumer of innovation may believe its national self interest lies in policies that devalue IP rights in order to cheapen access to innovative products.
However, all nations ultimately share the objectives of (1) maximising innovative output, and (2) maximising access to that innovation. A common, global approach to IP policy could result in enhanced outcomes on both fronts.
Research by the US Chamber of Commerce’s Global Intellectual Property Center (GIPC) suggests that high intellectual property standards create the conditions for innovation success on the macro-economic scale. Specifically, GIPC analysis shows a strongly positive correlation between stronger IP systems and universally desirable outcomes, such as innovative output, access to finance for start-ups, job creation in knowledge intensive industries and private sector spending on research and development, to name a few.
The results suggest that as countries of all sizes and levels of development enhance their IP standards they increasingly reap rewards that previously belonged to only a favoured few highly developed nations.
Looking beyond the empirical evidence, I believe that beyond simply putting IP laws and resources in place, the critical ingredient in an innovation ecosystem is confidence. The most successful innovative nations foster an environment where respect for IP rights is institutionalised.
In that environment, while individual administrative and judicial decisions may - and frequently do - go against rights holders, there is strong confidence that collectively such rights are systemically protected, enabling would-be innovators to take risks and invest substantial capital in the research and development of innovations.
Conversely, in many countries that are not today large-scale innovative economies, the IP regime, often weak to begin with, is usually further undermined by political rhetoric and policy measures that actively reduce the ability of innovators to rely on the system with any degree of confidence.
This suggests that there are three prerequisites for a strong IP system that supports an innovative economy: first, and fundamentally, a strong policy commitment to intellectual property through laws and mechanisms that promote patents, copyrights, trade marks and trade secrets; second, enforcement mechanisms sufficient to provide an effective deterrent against infringement, counterfeiting and piracy; and, third, a vocal and consistent political commitment to IP-led innovation.
With these three elements in place, innovators anywhere can risk and invest with confidence and any country can succeed in becoming an innovative economy.
Patrick Kilbride will be speaking at Managing IP’s International Patent Forum in London in March. For full details, see our event page.
