Transcript Lippoldt - Andrew Farlow

IP, Rx & FDI
Douglas Lippoldt
OECD & GEM-Sciences Po
The opinions expressed and arguments employed herein do not necessarily
reflect the official views of the Organisation or of the governments of its
member countries.
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Organisation for
Economic Co-operation and Development
• An inter-governmental organisation
• A forum for policy development and economic
analysis covering all areas of gov’t policy
except culture and defence
• Promotes policies for growth/employment,
economic development, expansion of trade
• 30 member countries: in Europe and North
America, plus Japan, Korea, Australia, and
New Zealand. (expanding)
• Industrialised, market-oriented, democracies
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TRIPS (effective 1995)
Art. 7: “The protection & enforcement of IPRs
should contribute to the promotion of
technological innovation and to the transfer &
dissemination of technology, to the mutual
advantage of producers & users of
technological knowledge and in a manner
conducive to social & economic welfare, and to
a balance of rights & obligations.”
Art. 66.2: Dev’d countries shall provide
incentives promoting tech transfer to LDCs
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Index of Patent Rights
Based on laws on the Books (0 = weak, 5 = strong)
TRIPS
4.5
4
3.5
OECD Countries
(n=30)
3
2.5
2
1.5
Developing
Countries (n= 92)
1
0.5
0
Source: Park and Lippoldt (OECD, 2008)
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Rx sector expenditure on R&D,
OECD countries
16000
USD, millions, PPP exchange rates
14000
12000
Australia
Belgium
Canada
Denmark
France
Germany
Netherlands
Sweden
United Kingdom
United States
10000
8000
6000
4000
2000
0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Year
Source: OECD Research and Development Expenditure in Industry database.
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Technology intensity of the pharmaceutical
sector, selected OECD countries, 1999
Sector
Pharmaceuticals
(ISIC 2423)
Chemicals excluding
pharmaceuticals
(ISIC 24, excl. 2423)
Total manufacturing
(ISIC 15 – 37)
R&D in relation to
production (%)
R&D in relation to value
added in sector (%)
10.5
22.3
2.9
2.2
2.6
7.2
Source: OECD (2005), Science, Technology and Industry Scoreboard 2005, Paris.
Source: OECD (2005), Science, Technology and Industry Scoreboard
2005, Paris.
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Net inflows of FDI, USD millions
500
450
400
350
Non-OECD Countries
(n=127)
OECD Countries (n=25)
300
250
200
150
100
50
0
1992
2002
Note: EIU - gross inflows 2006: USD 1335 bn
Source: World Bank, World Development Indicators, on-line edition.
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Direct Investment flows: pharma, medicinal
chemical & botanical products (USD, millions)
A. Inflows
Belgium
Czech Republic
Finland
France
Hungary
Mexico
United States
B. Outflows
Belgium
Czech Republic
France
Hungary
United States
2002
2003
2004
110.2
n.a.
n.a.
2,459.7
n.a.
n.a.
-4,132.0
527.5
-105.3
-124.2
910.5
21.3
n.a.
7,917.0
385.1
159.4
-86.9
-515.5
-32.4
327.3
1,566.0
-16.0
n.a.
-752.9
n.a.
4,411.0
371.6
3
1,503.6
3.5
4,403.0
4,813.0
1.9
1,003.8
20.6
5,969.0
Source: OECD (2006) International Direct Investment Statistics.
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Estimated relationship of FDI, imports, R&D,
non resident patent filings to index of patent
protection, 1990–2005
Economic
indicator and
sector of origin
Coefficient
estimate
N
R2
Developing Countries &
LDCs
1.14***
81
0.26
Developing Countries &
LDCs
1.18***
124
0.54
All available countries
1.04***
131
0.56
All available countries
1.01***
125
0.72
Country of destination
I. US outward FDI
(Assets of MNC foreign affiliates)
All Chemicals
II. Imports
Pharmaceuticals
III. R&D as % GDP
All sectors
IV. Patent apps by
non-residents
All sectors
Source: Derived from Park and Lippoldt (2007, forthcoming).
Regression analysis, controlling for various factors, e.g., other economic
influences (level of GDP per capita) & institutions.
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Estimates of the relationship of FDI to
strength of patent protection, 1990–2000
Economic
indicator and
sector of origin
Coefficient
estimate
N
R2
All countries
0.242*
153
0.12
Developing countries
0.361*
77
0.16
Country of destination
V. US outward FDI
Pharmaceuticals
Source: Park and Lippoldt (OECD, 2003)
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Conclusions
• Changing economic environment:
globalisation, strengthening of IPRs, etc.
• IPRs play key role in the ability of the
pharma sector to capitalise on their
innovation; positive relationship between
IPRs and FDI, trade, R&D, patent apps.
• IPRs: One important factor – among others –
influencing trade and investment decisions in
the sector (tech transfer) & innovation.
• Rx locational decisions: global competition