The Economist: Patently Absurd

The Economist recently published an interesting opinion article on the impact of innovation on the economy — specifically the negative impact of patent backlogs on business (particularly small entrepreneurial business).

Patently Absurd

INNOVATION and jobs have become a modern version of motherhood and apple pie in Washington, DC. Everyone in America’s capital wants lots more of both, or so they say. So how come Congress and the White House have decided not merely to underfund a crucial cog in American’s innovation machine but actually to take away revenue it earns? And that at a time when that cog, the Patent and Trademark Office, is already struggling to keep up with the growing demands upon it? The recent budget deal for fiscal 2011 (the year to September 30th) allows the Patent Office to spend only $2.1 billion. That is less than it expects to collect in fees from applicants—$100m or so will disappear instead into Treasury coffers—and far less than it needs to do its job properly.

Opinion: Knowledge-based jobs for health, wealth and security

The following opinion editorial on the future of knowledge-based economies was published by The Cameron Institute and raises some interesting thoughts in terms of how innovation can fuel economic growth while also helping improve patient outcomes and society as a whole.

What do miracle blood clot-busters, cold water detergents, chlorine-free coffee filters, lighter-weight motor vehicles, vaccines, disease-resistant shrimp, and bio-degradable plastics all have in common?  They are all products of knowledge-based industries.

Knowledge-based jobs are transforming the North American economy and society.  Increasingly, economies are measured by the contribution of knowledge to the gross domestic product; economic growth is being driven by innovation.

During the first decade of the 21^st century in Canada, 2.25 million jobs went to persons with postsecondary education and 139,000 jobs went to those with only high school.  On the other hand, almost a million individuals with primary or little education lost their jobs in the same period.

A similar situation exists in the United States where there is projected to be a 57% decline in employment in the textile industry between 2008 and 2018, 34% in electronics manufacturing, and 25% in newspaper printing.  Meanwhile jobs will grow in science and technology, healthcare, and information technology.

Many countries are aggressively investing to build their knowledge-based economies.  Jurisdictions that are successfully building knowledge-based economies have created fiscal, investment and regulatory environments in which firms can flourish.  They have not attempted to “choose winners” or save those “too big to fail” as in North America; rather, European and other foreign governments have removed the tax, regulatory and other punitive measures from innovative industries and let market forces populate their economies with high-value companies and jobs.

High wage, high-tax countries such as France, Germany and the United Kingdom, as well as low-wage, low-tax countries such as China and South Korea have all invested heavily in innovation.  Brazil, Ireland and Singapore – mid-income nations – have earmarked billions of dollars for knowledge-based jobs.  Australia leads the world in public expenditure on R&D as a percentage of gross expenditure.

Yet only five U.S. states have made a significant foray into building knowledge-based employment (California, Maryland, Massachusetts, New Jersey, and Washington) with Ontario being the only Canadian province that has even come close.

Innovation-based companies, once their products have been commercialized, have shown to produce a tax recovery ratio, over a decade, of $8.00 for every $1.00 invested.  For every direct job created, 4.5 indirect and induced jobs are created.  (This is compared to the multiplier effect of 1 for government spending and government jobs.)

Burden of NCDs in India – estimated USD 237 billion in lost national income (2006-15)

The Cameron Institute – a not-for-profit, public policy think tank — recently released an analysis of the economic impact of non-communicable diseases in India.

As of 2005, India experienced the “highest loss in potentially productive years of life” worldwide, according to an article published in The Lancet.The projected cumulative loss of national income for India due to non-communicable disease mortality for 2006-2015 will be USD237 billion. By 2030, this productivity loss was expected to double to 17.9 million years lost – almost 1,000% greater than the corresponding loss in the United States, which has a population a third the size of India’s.

Download and read the entire report.

The economic impact of IP infringement: a report from the U.S. GAO

The United States Government Accountability Office recently released a report on efforts to quantify the effects of counterfeit goods (Intellectual property:  observations on efforts to quantify the effects of counterfeit and pirated goods).

Intellectual property is an important component of the U.S. economy, however the report noted that the illicit nature of counterfeiting and piracy makes estimating the economic impact of IP infringements extremely difficult.

The report covered a wide range of industries, but of particular interest to patients is the information on counterfeit medicines.  Between 2004 and 2009, counterfeit pharmaceuticals accounted for 5% of all goods seized by Customs and Border Protection.  In 2009, 91 percent of the counterfeit goods from India were pharmaceuticals and perfume.

Latin American countries expected to increase access, spend more on medicines

Economic growth in developing Latin American countries is expected to foster greater spending on medicines to improve access, according to a new report.  Public drug expenditure in the region is expected to continue growing, as there is a considerable level of unfulfilled demand.  The report also notes that private pharmacy sales are also surging, due to higher disposable incomes in countries such as Brazil, Mexico and Venezuela.

The report predicts that the eight leading pharmaceutical markets in Latin America will grow by an average of 9.9% each year to 2014, by which time they will be worth a combined $80 billion at retail prices.  Domestic pharmaceutical production represents about half of the region’s market and imports are worth over $10 billion.  T he eight markets – Argentina, Brazil, Chile, Colombia, Cuba, Mexico, Peru and Venezuela – together have a population of 474 million people and their combined Gross Domestic Product (GDP) totaled $3.4 trillion last year.

Public-sector access to medicines in these countries has increased, particularly among the least well-off, with initiatives such as Remediar in Argentina, PAC Saude in Brazil, Auge in Chile, Seguro Popular in Mexico and Barrio Adentro in Venezuela.  Governments are using their bargaining power to negotiate and centralize drug purchases in order to contain costs.  In contrast to developed markets, consumption of generic drugs is very low in Latin America, apart from in Brazil, which is the region’s biggest market and where local protectionism, very low prices and high production capabilities have combined to develop a sizeable bioequivalent generics market which has proved problematic for foreign generics makers.

Ministers from Least-Developed Countries develop strategy to encourage local innovation and investment

Ministers and other senor government officials from least developed countries agreed to a strategy for using intellectual property to encourage local innovation and encourage foreign investment at a recent WIPO Forum.  The ministers also discussed the challenges facing LDCs in this area, in particular the difficulties for LDCs to obtain better access to technological information.

WIPO Director General Francis Gurry told participants that IP is a key element in reducing the knowledge gap and the digital divide.

Mrs. Mpeo Mahase Moiloa, Lesotho’s Minister for Law and Constitutional Affairs, said formulating national policies that integrate strategic use of IP is a priority for LDCs.  She noted that LDCs will reap the benefits of IP once IP considerations are fully integrated into national policies.

Ethiopia’s Minister for Science and Technology, Mr. Juneydi Saddo, called for WIPO’s support in manpower training and bridging the technology gap, noting that “intellectual property is critical to this.”

A Ministerial Declaration urged WIPO to intensify its capacity-building assistance for LDCs and to support LDCs in improving competitiveness of their enterprises through regular access to new technologies. The Declaration also appealed to development partners to make more funds available for LDC-specific projects.

Tanzania’s Minister for Industry, Trade and Marketing, Mrs. Mary Nagu, said that while LDCs once viewed IP as a monopoly tool, they now see it as “an instrument for sustainable development.” Mrs. Nagu said her country has put in place comprehensive copyright laws that have created opportunities for developing the entertainment industry and contributing positively to the country’s gross domestic product.

New National Intellectual Property Strategy for Barbados

Experts from the public and private sectors participated yesterday in a National Consultation on the Formulation of a National Intellectual Property Strategy for Barbados, hosted by the Ministry of Foreign Trade and International Business.

Donville Inniss, the Minister of State in the Ministry of International Business said the strategy would assist in realizing the full potential of intellectual property in Barbados and the benefits that can be derived.

There can be no doubt that without a national intellectual property strategy, a country will experience many challenges in encouraging, promoting and protecting indigenous creativity and innovation.

The Consultation highlighted intellectual property strategies and key recommendations from intensive working group sessions.  The meeting was designed to stimulate public awareness of the various aspects of intellectual property and show how such valuable assets can be developed and managed efficiently to enhance the social and economic advancement of Barbados.

References:
Nation News
Caribbean Press Releases

Strong IP system boosts knowledge economy development

Strong intellectual property protection is essential to the economic growth of developing countries, according to a senior official with the World Intellectual Property Association.   “It is a myth and complete misunderstanding to think that IP protection is not important. It is relevant to all countries wanting to build up their economy,” stated the WIPO official.

Ensuring strong intellectual property protection also encourages innovation, which is particularly important as it relates to medical innovation.  Patients around the world benefit from the development of new medical treatments as well as improvements to existing technologies, products and processes.

Malaysian National News Service – Strong IP System To Boost Knowledge Economy Development
GENEVA, Nov 14 (Bernama) — A strong intellectual property (IP) system not only boosts but forms an essential component of a countrys development of its knowledge-based economy, says a senior official with the World Intellectual Property Organisation (WIPO).

“It is a myth and complete misunderstanding to think that IP protection is not important. It is relevant to all countries wanting to build up their economy,” said Yo Takagi, an executive director with WIPO.

Today’s economic growth is being led by innovation where it has surpassed labour and productivity growth in some countries, he said.

“Knowledge-based international trade in the recent decades has increased and on a global average it has overtaken the trade of resource-based products,” Takagi said during a seminar on IP here for journalists from 25 developing countries and countries in transition.

In the share of exports comprising manufactured products globally by technology, in the last 30 years, middle-tech products have remained in the upper rung, while high-tech products have begun to surpass that of lower tech products and resource-based products, he said.

There is no denying that innovation in all areas has become the driving force of economic growth and with this, the increasing importance of properly placed IP laws which will protect the owners of such properties and rightfully the economic benefits that they will be able to derive from their innovations, Takagi said.

“Twenty-eight years ago, IP was covered by dust, nobody thought of it as an important aspect of economic development. A good IP system will both nurture the growth of intellectual properties and their protection against various infringements,” he said.

An IP is broadly described as an authentic creation, big or small, whether of a complete product or part of product, a technology as well as creative works like designs and writing, and it can be the creation of a company or an individual. It gives the creator of the entity the right to protect the work or entity lawfully, whether through the ownership of a patent, copyright and trademark.

All intellectual properties are economic tools and as such they should be rightfully protected and respected. But in reality, it is not always so.

While there are various international and national laws governing patents, copyrights and trademark, the infringements are wide and many, often going across borders.

The infringements are plenty and the area of IP has remained a major challenge for policy makers as well as legal practitioners in the field amid the growing challenges and technologies thrown in by the new media like the Internet.

Among others, education, establishing national systems of innovation, IP institutions are all factors that will contribute towards using IP as a tool for development and will also enhance a nation’s competitiveness when participating in the global market, Takagi said.

Malaysia has been one of the earliest countries in the Asian region to sign on a WIPO treaty. In 2007, it was among the top 10 developing countries filing for patents with the WIPO.

The origin of WIPO dates back to the late 19th century with the adoption of the first international IP treaty, the Paris Convention for the protection of industrial properties. Today, it is one of the 16 specialised agencies of the United Nations.

Strengthening the economies of developping countries through intellectual property

As reported in This Day Online, Assistant Director General of the World Intellectual Property Organisation (WIPO), Mr Geoffrey Onyeama, has advocated a structured approach in harnessing Nigeria’s intellectual property assets, which he said  remained one of the tools for economic development.

“The most important source of technological information known to man today is the patent system. And Nigeria needs to seize the opportunity”, he stated.

The top WIPO official said the country has creative sectors such as the pharmaceutical, music and film industries, research sector, cultural sector and individual inventors that remain untapped.

“In a world increasingly geared towards wealth creation through intellectual property, Nigeria has vast opportunities to diversify its economy. The level of awareness at the policy level is important”, he said.

“Nigeria’s strategy should be to increase our intellectual property assets by strengthening the necessary institutions, giving them the autonomy to operate and enacting legislation to achieve these objectives”.

“Oil is the mainstay of our economy now. When oil finishes, what you will need to be competitive is a knowledge economy. Countries like Switzerland, Singapore and Japan have no natural resources but have built their wealth based on intellectual assets”.