Asia-Pacific Finance and Development Centre

2006 Biennial ForumShanghai, September 2006

Session V: Regional Cooperation and Innovation Development

Presented by Ken Waller

Senior Advisor

Australia ABAC Secretariat

Agenda

• Cooperation in APEC – Innovation and Development

• Financial Markets – Supporting Innovation

• Technology in Finance and Innovation

• The Challenge of IPR

• APEC and ABAC – Roles and Objectives

• Capacity Building – Critical Pillar

• Summary

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1. Cooperation in APEC Innovation and Development

• 21 economies – diverse; high to low income economies

• Voluntary and non-binding

• Capital rich and highly innovative societies and poor

communities

• Differences promote opportunities for cooperation

• Development and growth – the cooperative challenge

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1.1 Cooperation in APEC Innovation and development

• Key objectives of cooperation

– Economic growth and higher living standards

– Strengthening economic frameworks and financial systems

– Promoting standards, IPR, innovative and emerging

technologies

– Developing regional responsiveness to natural disasters;

pandemics; terrorism

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1.2 Cooperation in APEC Innovation and development

• APEC Leaders commit to

– Strengthening IPR protection and enforcement

– Adopting anti-counterfeiting and anti-piracy initiative

– Sharing of technologies

• ABAC (Business) promotes information and

communication technology

– ICT – growth on a regional collaborative basis

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2. Financial markets Supporting innovation

• History of money – as a means of intermediation

– John Law – early part of 18th Century – “demand for money”

• Value not dependent on gold or silver

• Value - facilitates transactions

• Continuous innovation – capital markets

• Forwards/derivatives/ “atomising risk”

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3. Technology in Finance and Innovation

• Finance system deeply influenced by technology

• Technology a “financial enabler”

– Enriching physical and human assets

– Key driver of productivity growth

• Revolutionised finance – real time transfer of wealth

on massive scale – within economies and across

borders

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3.1 Technology in Finance and Innovation

• Application of technology to finance best secured by

– Open, innovative and competitive financial markets

– Supporting legal framework/ enforcement of contracts

– Best practices regulatory environment

– Risk management and good governance

– Skilled people, rewarded for good judgement

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4. The challenge of IPR

• World Bank – IPR protection highly important

– to capital poor, but labour and knowledge rich developing

– economies

– for SMEs reliant on strong legal system and enforcement

• Challenge is finding effective balance on IPR

enforcement and sharing of knowledge

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4.1 The challenge of IPR

• Knowledge and ideas - transformed to services and

products - basic ingredients to commerce and trade

• Innovation essential ingredient to growth – particularly

important to services

• Protection of IPR – promotes knowledge transfer

• Analysis points to direct benefit – good patent regime can

raise growth by 0.6% on average

• A vital aspect of removing “behind the border” impediments

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5. APEC and ABACRole and Objectives

• Cooperation between member economies to

achieve APEC objectives

• Business (ABAC) strongly endorses and supports

cooperation between economies

• Central mechanism to improve human capital –

capacity building

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6. Capacity Building Critical Pillar

• Many participants – IMF, World Bank, OECD, ADB

and APEC - knowledge and experience sharing

• Business/academia at the “sharp end” of

innovation and knowledge transfer

• Both want fair reward for risk and innovation

• Both are critical participants in capacity building

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6.1 Capacity Building Critical pillar

• Facilitating capacity building

– For companies; open and welcoming foreign direct

investment policies

– Competitive markets in which innovation and reward for

risk fully compensated

– Protected by legal system

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6.2 Capacity Building Critical pillar

• APEC/ABAC encourage investment liberalisation –

collective and unilateral policies of APEC

• APEC works with international organisations to

enhance human resources skills

– in building economic/social government institutions

– in strengthening financial systems including anti-money

laundering

– promoting skills and governance in legal systems

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6.3 Capacity Building Critical pillar

• APEC

– Recognises public and private partnerships

• IPR protection

– Requires community-wide involvement

• APEC Comprehensive Strategy on Intellectual

Property Rights

– Model guidelines for members’ authorities to inspect,

suspend, seize and destroy goods

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6.4 Capacity Building Critical pillar• APEC measures cont.

– ensure internet and e-commerce are not used to facilitate

trade in counterfeit goods

– develop model guidelines in line with internationally

agreed conventions and treaties

– strengthening operational contacts between national

agencies

– establish websites in each member economy

– organise enforcement training – involving business

– promote public awareness / media campaigns

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7. Summary

• APEC – impressive growth and development; strong

and robust outlook

• Based on open, liberal and competitive markets and

enabling investment policies

• Innovation/technology/ finance – deeply interrelated

• IPR protection – contributes to growth and prosperity

– priority for APEC – IPR to grow in relevance as region

integrates

• Capacity building - public/private partnerships

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