Transcript WIPO WORLDWIDE ACADEMY

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
IPRs IN THE WORLD ECONOMY




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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
Composition of World Trade
(percentages)
45
40
35
30
25
Primary
Tech intensive
20
15
10
5
0
1976
1996
Worldwide Patent Filing - Trends
(‘000 )
3000
2500
2000
Total
National
Foreign
1500
1000
500
0
1987
1988
1990
1992
1994
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
Economic Growth and Technology
GDP
Country
High GDP
Low S&T
High GDP
High S&T
Low GDP
Low S&T
Low GDP
High S&T
Ideal Growth
Path
S&T
Growth Competitiveness Index
Three Variables :
Core
Non-Core
1. Public Institutions
Protection of rights
Resolution of disputes
Efficiency / transparency
25%
33%
2. Macro Economic Environment
Monetary and fiscal policies
3. Technology
Without tech progress can
accumulate capital but not
sustainable growth
25%
33%
50%
33%
How is Technology Obtained

Core Innovation

Technological Diffusion
R & D Expenditures
2.5
2
1.5
Indzd Cs
Dev'ing Cs
1
0.5
0
0
9
19
2
9
19
4
9
19
6
9
19
8
9
19
0
0
20
Industrialized Countries : US$ 583 billion
Developing Countries
: US$ 57 billion
Technological Diffusion


Rapid growth if successful in
adopting/adapting foreign technologies
FDI - effective way of technology transfer
and facilitated by the domestic environment
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



Size of the market
Stability of macro economic policies
Free repatriation of profits and dividends
Guarantees against nationalization
Protection of Intellectual Property Rights
Survey - Protection of IPRs
and Decisions on FDI
By type of Industry
70%
60%
50%
40%
30%
20%
10%
0%
Elect
Eqpt
Food
Mchnry
Chemls
By type of Investment
80%
70%
60%
50%
40%
30%
20%
10%
0%
Sales
Rud
Prodn
Comp
Manfr
R&D
Chemicals Industry
Response for making investments in
manufacturing and R&D facilities
100
80
60
40
20
0
Chemicals
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
Importance of Trademarks


Marketing strategy - differentiate products
from those of rivals and develop longerterm/emotional relationships with
customers
Attempt to move customers from




brand
brand
brand
brand
awareness, via
recognition, to
preference, and finally to
insistence
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
Value of Mark
in Total Value of Firm
90
80
70
60
50
40
30
20
10
0
Industrial
Financial
Services/Auto
Food/Luxury
70
60
50
40
30
20
10
0
Mercedes
Marlboro
McDonald's
Disney
Nokia
Intel
GE
IBM
Microsoft
Coca-Cola
Brand Values
( US $ billion)
Contribution of CR Industry

Core industry :


Industries partly covered by CR


manufacturing, business practices
Distribution


creation of products or works
transport, bookshops, record stores
CR related industry

production and tech assistance with
equipment- computers, radios, TV
Share in Development

US



5 % of GDP
3.24 % of employment
MERCOSUR


6 % of GDP
4 % of employment
World Music Sales
Sales Drop:
Peer-to-peer file sharing
25
•BE,
20 DK, GR,
15 PT, SE, CH
IE,
Leg Sales
>10%($ Bn)
10
2003
2002
2001
2000
1999
• Cuts in jobs and
5
marketing expenditures,
0
winnowing
repertoires of
poorly selling artists
• download 410 m files
100
per
80 day as against legit
60
sales
of 5 m units
40
20
0
2003
- 14%
2002
30
•France
m daily users
2001
- 20%
2000
•Germany
35
160
140
• 7.4
120
1999
40
Peer-topeer
down
loads
(Bn
Files)
China Software Industry
Projections

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
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$ 3600m in sales
$ 6200m in
economic activity
$ 590m in tax
104,000 jobs
10% decrease in piracy




$ 480m in sales
$ 820m in
economic activity
$ 80m in tax
13,000 jobs
Thank you