* This is my article in BusinessWorld last Friday, May 17, 2019. I forgot to mention the Institute for Democracy and Economic Affairs (IDEAS, Malaysia) as co-sponsor of the seminar when I submitted my paper to my editor. IDEAS helped a lot in organizing that event.
Kuala Lumpur — I just attended the “Asian think tanks
dialogue on Innovation, Competitiveness and Development” in Kuala Lumpur
sponsored by the Geneva Network (UK). The event, last Wednesday, was attended
by mostly free market-oriented and independent think tank leaders with
participants from China, India, Indonesia, Malaysia, Myanmar, Philippines (me),
Singapore, S. Korea, Thailand and Vietnam.
The first presentation was “The Policy Ingredients for
Innovation: Lessons From Abroad” by Nigel Cory, associate director for trade
policy of the Information Technology and Innovation Foundation (ITIF, US).
Nigel emphasized that intellectual property rights (IPRs) are essential for
innovation because they (1) Create incentives for innovation and help repeat it
in a virtuous cycle, (2) Induce knowledge spillovers that help others to
innovate, (3) Attract investment and ensure companies can focus on innovating,
(4) Promote the international diffusion of technology, innovation, and knowhow,
and (5) Boost domestic levels of exports, R&D, and FDI.
The second paper was “The Role of IPR for Asian
Development” by Philip Stevens, founder and director of Geneva Network. Philip
showed a ranking of Asian economies, from the most to least innovative, in the
Global Innovation Index (GII) 2018 Report. I added the GII 2012 Report here to
show changes in global ranking and scores of selected economies (see table).
Third paper was “IPR and Access to New Technologies” by
Amir Ullah Khan, professor at Maulana Azad National University in India. Amir
showed some glaring health data in India: 1 government doctor caters to 11,082
people, 1 government hospital bed to 1,908 people, and 80% of the population do
not have significant health coverage.
Then he showed the negative impact of heavy government
interventions like drug price control and patent-busting compulsory licensing:
“With non-availability of cancer drugs, price controls have had a depleting
effect on the efforts towards development of new antibiotics. Of the 18 largest
pharma companies, 15 have stalled work in antibiotics due to economic,
regulatory and scientific obstacles.”
Fourth and last paper was on “Emerging Policy Threats to
Innovation” by Azrul Mohd Khalib, founder of the Galen Center for Health and
Social Policy in Malaysia. Azrul discussed the IPR on health polices in four
ASEAN countries. In Indonesia for instance, amendments to the Patent Law would
require that the manufacture of patented products and use of patented processes
should take place in the country. In Malaysia, there is concern on IP
protection and enforcement because the government has either issued or threaten
to issue compulsory licensing.
The Philippines has shown improvement in global ranking
and score but it still belongs to the bottom half in ranking as shown in the
above table. Now there is growing appreciation about the importance of
innovation and IPR protection.
A BusinessWorld report, “IP protection applications rise
15% in 2018” (March 5, 2019) said, “IPOPHL said filings for patents, utility
models, industrial designs, trademarks, and copyright deposits in 2018 totaled
44,461, up 15% from a year earlier. Applications filed online totaled 10,346
last year, up 35%. This covers all IP types, except copyright deposits.”
While many Asian countries appreciate the value of
innovation, there seems to be less appreciation on the value of IPR protection.
As pointed out by Philip, among the weaknesses in Asian innovation are
counterfeiting (3.3% of global trade in 2016, higher in Asia), online piracy,
more difficult to secure and defend patents (compulsory licensing, restrictive
patentability criteria like in Thailand, average of 16 years to gain a pharma
patent).
There should be more understanding and appreciation by
governments to promote and protect IPRs. Most physical property values now are
predicated by non-physical property values, like shoes with “big check” logo
and trademark are more expensive than lesser-branded logo.
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See also:
BWorld 325, Power shortage as election issue, May 13, 2019
BWorld 326, Low growth, high taxes as election issue, May 14, 2019
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