Intellectual Property and Its Role in Economic Development

Jared NyaguaIP and New Technologies Division, WIPO

WIPO National Roving Workshop on IP StrategyBeira, Nampula and Maputo, MozambiqueFebruary 6 to 14, 2006

Topics to be Covered

I. What is IP? II. Why is IP Important? III. What is IP Strategy? IV. Who will make IP Strategy? V. How to make IP Strategy?

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I. What is IP?

PROPERTY

Real

Personal

Capital

Intellectua

l

VALUE CREATION ACTIVITY

Product Creation Investment Improvement Sale Rent or Licensing

RESULTS

Revenues/ Profits

Employment Appreciation Solution of

Needs

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Patents (inventions) Trademarks Industrial designs Geographical

indications Copyright (works of

authorship) Trade Secrets, etc.

Human CapitalHuman Capital

Strategically Developed,

Targeted to a Marketand Used

Strategically Developed,

Targeted to a Marketand Used

+

What are “IP Assets”?

II. Why is IP Important? Economies

based on land, physical assets

Trade in goods Cheap labor Nationally

based trade Pre-Internet

economy

Old Economy New Economy

• Knowledge Based Economies

• Value-added goods /IP Licensing

• Productive Human Capital

• Regional/Global Markets

• Internet

There is an IP Divide... 91% of patents are from OECD

countries. PCT filings and national patent

filings in developing countries are by non-residents primarily.

Why IP is Important?

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Cultural industries Trade in cultural goods has grown exponentially over the last two decades.

Between 1980 and 1998, annual world trade of cultural goods surged from US$95.3 billion to US$387.9 billion.

On a global scale, trade remains concentrated in a few countries: in 1998, thirteen countries were responsible for more than four-fifths of imports, and twelve countries for the same proportion of exports.

Why IP is Important?

World Trade of Cultural Goods (in millions of dollars, 1980-98)

Source: Study on International Flows of Cultural Goods Between 1980-98, UNESCO 2000.

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Because of technology access...

Lack of IP assets is a disadvantage Royalty drain instead of royalty stream Owning IP assets is an advantage

Why IP is Important?

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Because of IP Licensing... Worldwide licensing revenues

– In 2001, $US 100 billion estimated Pharmaceutical licensing

– In 1996 US$3.5bn– In 2000 US$10.5bn

IT licensing University and research center licensing

– In 2000 $US 1.3 billion by non-profits in North America

New entrants--Singapore, Brazil, Korea

Because IP Owners Use IP Assets to Make Money...

Build valuable portfolios of IP as base for licensing revenues;

Offensive: Monopoly power for price and products;

Defensive: Avoid and defend against litigation; Enhance products, upgrades, higher revenues

and margins; Promote brand value for advertising; Attracts Investments, Strategic alliances, joint

ventures; Enhance corporate valuation.

Why IP is Important?

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Because IP is in Every Sector...

Categories of technical projectsfunded by the World Bank andRegional Development Banks

Issued patents by the USPTO(since 1976) related to thosecategories

Patents published in2001 and 2002 at theEspacenet

Water: Management Irrigation Sanitation Power Drink

147,01714588654

4,962261

100,000675

2,687205

17,2291,649

Agricultural technologiesFood processingAgricultural irrigationCottonSugarcaneCacaoMangoRiceCoffeeCoconut

3969136

2,304793725

1,1501,945257

6,2024,837125

21,52644436896

29,49313,1701,927

Solar powerPhotovoltaic

1,1871,716

4,1575,870

TransportRoad construction

23,643260

83,2811,918

Emergency assistance 82 215Patent applications published in 2001 and 2002 in member States of the European Patent Organization,the European Patent Office and the World Intellectual Property Organization.

Can IP Assets be Developed?

III. What is IP Strategy?

Public IP Strategy

What is happening here? The task is to identify what governmental and

enterprise policies support such results, and to provide tools to Member States to implement such policies in a proactive way.

SOUTH KOREAN CASE

0

20

40

60

80

1986 1991 2000

% resident

Can IP Assets be Developed?

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Public IP Strategies Today Australia Canada Philippines Japan ASEAN Romania European Union Mexico

Two Complementary Ways

IP

Importation=TOT

Importation=TOT

local creationlocal creation

Can IP Assets be Developed?

Universities, public research centers; SME promotion and incentives; Targeting and protecting new technology; Recognizing local inventions in joint

ventures, FDI, technical assistance projects;

Modification, enhancement of traditional knowledge/folklore.

LOCAL CREATION OF IP ASSETSLOCAL CREATION OF IP ASSETS

Can IP Assets be Developed?

Academia[Universities,

Research Centers]Government

Private Sector[large enterprises,

SMEs,individual inventors,

NGOs]

IV. Who Will Make IP Strategy?

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V. How to Make IP Strategy?

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The IP / Innovation Strategy House

Economic Growth

Technological Development and Solutions

Networks

Laws and Policies

IP Audit and Plan

Clusters

Funding/Valuation

Policy

Commitment

IP Ownership

IP Skills

•

TOT/Licensing

Marketing

Incentives

Education

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Expenditure in R&D as % of GDP(2001)

Total Expenditures (1989-2000 average) in R&D as a % of World GDP: 2.12%Sources: 2002 World Development Indicators (World Bank) and UNESCO Institute for Statistics (March 2005).¤ Data for 2000 # Data for 2001

0

1

2

3

4

5

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Expenditure on R&D as % of GDPhas been increasing in Uganda…

1996 0.51%

1997 0.53%

1998 0.57%

1999 0.65%

2000 0.74%

2001 0.82%

Source: UNESCO Institute for Statistics, March 2005

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...But the source of funds (%) for expenditure on R&D comes mainly from abroad

Funds from abroad 90.3%

Government 6.6%

Higher Education 0.6%

Business Enterprise 2.2%

Private non-profit 0.3%

Source: UNESCO Statistics Institute, March 2005

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Uganda has 14 Universities and at the National Agricultural Research Organization (NARO) there are 9 Research Centers. Still, the average of researchers per million people (2001) is still low

Argentina 709 Singapore 4,053

Brazil 352 Sudan 245

China 584 S.Africa 192

Croatia 1,192 Uganda 25

Finland 7,110 UK 3,100

Japan 5,320 Zambia 55

Source: UNESCO Statistics Institute, March 2005

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The Program Theme One: Introduction Theme Two: Professional Training Theme Three: Policies and

Incentives Theme Four: Funding Theme Five: IP Strategy Game

(small groups) Theme Six: IP Audit Tool

(small groups)