IP Watchdog recently published an article by Dr. Kristina Lybecker, in which she provides an interesting economic and social case for strong intellectual property protections. Dr. Lybecker highlights how strong IP protections attract foreign direct investment and research spending, with developing nations in particular standing to gain from the creation of jobs, enhanced productivity, and fostering of economic growth and development.
"Strong intellectual property rights incentivize innovation which facilitates economic growth and development. The benefits of intellectual property rights are well established and impossible to deny, translating into greater prosperity for nations, industries, firms and individuals. We all stand to gain from enhancing IP rights, industrialized and developing nations alike."
From IP Watchdog
May 2, 2014
While there is strong evidence that robust intellectual property rights protection fosters economic growth and development, suspicion of stronger intellectual property rights remains front-and-center in the public debate. This is particularly true in the context of developing countries where some claim that strong IP rights are an obstacle to economic development. Notably, Brazil and Argentina have led a group of developing countries to propose that “ there should be a presumption against increased international protection of IP rights, allowing ‘higher standards of protection . . . only when it is clearly necessary . . . and where the benef its outweigh the costs of protection.’”
Despite these claims, study after study confirms that strong intellectual property rights are beneficial. In an UNIDO (United Nations Industrial Development Organization) review of close to 200 studies on intellectual property rights and economic growth, Falvey, Foster and Memedovic (2006) find overwhelming evidence that strong intellectual property rights protection generates economic growth. Moreover, while the impact depends on the country’s level of development, this powerful result holds true for industrialized and developing nations. For high-income countries, their analysis concludes that strengthening intellectual property rights leads to growth through increased innovation and technological diffusion. For middle-income countries, they establish that a more robust IPR environment boosts domestic innovation.Although stronger IPR protection will preclude imitation, domestic firms benefit from technology diffusion through foreign patenting and international trade, all of which can lead to economic growth. Finally, for low-income countries, the authors conclude that increased IPR protection encourages growth, but the manner in which this is manifest is not yet known.
The bottom line is that decades of study and scores of researchers demonstrate that a robust intellectual property rights regime is beneficial to economic development. Fundamentally, strong IPRs are an essential foundation for long-term growth. Moreover, this happens through a variety of welfare-enhancing channels, including technology transfer, tacit skill acquisition, education, job creation, wage growth, and foreign direct investment.
