Do China And India Really Want Stronger Intellectual Property?
from the stay-tuned-to-find-out dept
Over the past few months, I have been researching the role that intellectual property plays in China and India, with specific attention to the frequent calls for increased protection in those countries. I believe that a careful and critical review of national goals, potential solutions and likely outcomes will, in fact, make intellectual property harmonization a disagreeable mechanism for bringing China and India to continued global prestige. This series, adapted from a recent paper, will first outline the role that intellectual property can play in economic development. Because of their relative importance, patents will be the focus. Following brief overviews of the intellectual property systems in China and India, it will examine the case for stronger IP in China and India. The most time will be dedicated to explaining why strengthened intellectual property is likely to disproportionately advantage the developed world, decrease the ability of China and India to diffuse productivity-enhancing innovations, prove both insufficient and unnecessary for promoting innovation, and even be counterproductive to the countries' innovation systems. Finally, the series will end with recommendations for the way forward for China and India.
Every year, in conjunction with the content industry, the US Trade Representative produces the Special 301 report that identifies other nations as significant concerns in regards to intellectual property. It is among the most prominent reminders of the substantial pressure placed on countries to consistently strengthen their national intellectual property regimes. For two developing nations, China and India, the pressure is particularly noteworthy. Governments, donors, private industry and academia give these rising superpowers dozens of reasons to believe that stronger intellectual property is a highly desirable improvement to their respective business environments. They propose international intellectual property "harmonization" - a process through which the developing world upgrades protection and enforcement of intellectual property to levels seen in the developed world, if not further.
A Brief Background On The Challenges Facing China And India
China's spectacular rise over the past three decades has been thanks, in large part, to good infrastructure and low-cost labor. But to continue its meteoric climb, China must make a sustained commitment to developing as a knowledge economy - one that effectively harnesses and uses new and existing knowledge to improve productivity and increase overall welfare. Right now, the service sector is very underdeveloped in China for a country of its per capita income; and although China is now the third largest spender in absolute R&D, productivity is low and regional inequalities are stark. China's leaders must take a multipronged approach to development by: promoting competition; upgrading education and learning; exploiting global knowledge; diffusing new technologies; supporting small and medium enterprises; and establishing a viable social security system.
Although China receives much of the media attention, India, too, has enjoyed historic success over the past couple decades. India's unique characteristics - skilled, English-speaking knowledge workers with diaspora linkage, free market institutions, a well-developed financial sector, and macroeconomic stability - make the knowledge economy an attractive national goal. However, the success stories of Indian IT firms betray the significant challenges facing India. India needs to strengthen the institutions supporting an efficient innovation system. It remains a relatively closed economy that receives minimal foreign direct investment (between 2003 and 2004, India received only $4.26 billion, compared to $53.5 billion in China) (Dahlman 2005). Further, it currently devotes little GDP to R&D, and private sector involvement is crowded out by government intervention. Finally, India must continue to develop a broad base of educated and skilled workers.
Other posts in this series:
- Do China And India Really Want Stronger Intellectual Property?
- A Brief History Of Intellectual Property In China And India
- Why Might China And India Want To Strengthen National Intellectual Property Policy?
- Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
- In China And India, Stronger Intellectual Property Is Unnecessary
- There Is No Harmony In A Patent Thicket
- The Way Forward On Intellectual Property For China And India