Intellectual property rights and economic development

Makarim Wibisono Geneva

Intellectual property (IP) is a topic which, until some years ago, was largely unheard of in many parts of the world, either because such places were too remote, or because they were not sufficiently industrialized to be concerned by this notion or to perceive the need for it.

However, globalization, through its sheer speed, bolstered by highly sophisticated modern technologies, has rendered the old economic paradigms obsolete and created new needs. It has also brought the world of knowledge to the fore in the world economy as a tool of human advancement. Never in history has the world of knowledge been more closely interlinked with the world economy than it is today, leading to the coining of a new concept, that of the knowledge-based economy.

The resulting explosion in the dissemination of ideas and wealth creation has not been equaled since, perhaps, the invention of the steam engine -- with comparably dramatic consequences for the world. As the economic value of knowledge- based agents has overtaken that of industrial companies, as reflected in the power of the equity markets over companies in recent years, a dichotomy has begun to surface.

A divide has appeared, clearly separating those who can embrace the power of globalization to achieve prosperity and those who can only live through its destructive consequences. The latter, composed almost entirely of developing countries, will be left behind unless they can develop the technical know-how, capacity, and structures needed to bring them up to par and enable them to hold their place on the world markets.

It is certainly praiseworthy that the major international bodies and institutions concerned with development now see the need to facilitate the way to development for developing and least-developed countries as an urgent necessity. Accordingly, they have begun to make more concrete efforts to advance a platform whereby richer countries will make greater concessions to liberalization and free trade.

However, the developing countries should not rely on international goodwill alone. Instead, they need to adopt a more proactive stance. One can but applaud, therefore, that there is a growing realization among these countries of the nature and extent of their own individual potential and assets, and of the fact that these can, and must, be developed from within. This realization is capital for the developing countries in that it forms the basis on which they must build in order to become fully-fledged actors who are able to move confidently upstage on their own merits because they have something to sell.

No country in the world is entirely without resources. Yet, while in the days before globalization-on-steroids such resources were not even considered as wealth, nowadays the valuation mechanism has changed. These assets are now understood to have a worth, they have value added. The more exclusive they are, the more unique they are, the greater their worth.

Once a country is aware that it has a set of "talents" that can be cultivated and developed, it is already looking at potential advantage. Nevertheless, globalization has made these assets eminently "poachable". Why? Because the sort of talents we are talking about here have to do with invention, research, creation, art and design, culture -- covetable intellectual assets that have a high worth.

But the very attractiveness of these assets, their visibility as they are exposed by today's high-powered technology, make them extremely vulnerable. It is this vulnerability, and the consequent need for protection, that make the urgent establishment of an efficient IP regime, and of IP rights as a matter of course in all countries, such an all-important necessity.

Without proper protection, a country's exclusive assets are as good as worthless, because they can be appropriated or "pirated" by others. The once efficient barriers of time and distance are no longer sufficient to protect the value creators in the age of easy global communication. Every day, hundreds of millions of pairs of eyes are probing the Internet screens in search of "good ideas" to be exploited for financial profit, or come across them by accident.

These practices result in massive economic losses for creators unless they can protect their inventions. Thus, the developing countries must imperatively develop and master a strong system of safeguards if they want to protect their own intellectual resources from unlawful appropriation by others in order to turn them into marketable "products", capable of generating wealth for their own economies.

IP rights revolve entirely around this notion of "ownership". In other words, a country, business or person must be able to claim exclusive ownership of their assets in order to protect the latter from exploitation by others. This notion is central to the ability of individual countries to make use of their intellectual resources as instruments of development.

Protecting this ownership, and the modalities of this protection, are of absolutely crucial importance to all developing countries, including Indonesia, if they are to thrive economically in the modern trading environment.

Although most developing countries are now aware of this, there is still a severe lack of familiarity with IP, which is still regarded by most people as a pretty arcane and mysterious field.

The writer is an Ambassador/Permanent Representative of Indonesia in Geneve. This is a personal view.