Measuring the Economic Impact of Intellectual Property Systems

July 2007

“There is a strong demand for empirical data on the possible impacts of the IP system on economic development.”- WIPO Assistant Director General Geoffrey Onyeama at the Tokyo symposium. (Photo   UNU)
“There is a strong demand for empirical data on the possible impacts of the IP system on economic development.”- WIPO Assistant Director General Geoffrey Onyeama at the Tokyo symposium. (Photo UNU)

The role of the intellectual property (IP) system as a stimulus for promoting technological innovation, improving trade and enhancing competitiveness is much discussed. Numbers, however, sometimes speak louder than words. And as Member States have highlighted in the WIPO Development Agenda discussions, there is a pressing need among policy-makers for hard, empirical data which demonstrates the precise impact of IP on economic development.

Developing reliable methodologies to capture and measure this impact accurately, however, presents a major on-going challenge. WIPO’s Guide on Surveying the Economic Contribution of the Copyright-Based Industries, published in 2003, makes an important contribution in this respect, focusing specifically on the copyright sector. Now, WIPO’s newly opened Japan Office has launched a major study of the economic impact of IP systems in six Asian countries– China, India, Japan, Malaysia, the Republic of Korea and Vietnam – with the aim of assessing and developing a sound methodology for carrying out such economic research. If the project is successful, the methodology could be applied in other regions of the world, offering a useful tool for Members States wishing to conduct similar projects.

The methodology used in the study, which encompasses a cross-section of industrial sectors, has three main components and incorporates company data dating back over the last 20 to 30 years:

  • Part 1 consists of a survey of national policy reforms geared towards IP-based economic development;
  • Part 2 contains case studies on individual companies from different industrial and commercial sectors;
  • Part 3 consists of economic analysis using economic models.

The project research team is composed of national experts with backgrounds in IP, law and economics, selected from countries with differing social and economic profiles. 

Preliminary findings

In May, WIPO and the United Nations University, in cooperation with the United Nations Information Centre (UNIC) and the Japan Patent Office (JPO), held an open symposium in Tokyo, at which the experts from the six participating countries presented their findings to date. While most of the experts were still at the second stage of the research process, they reported initial results indicating a positive correlation between the strengthening of the IP system and subsequent economic growth, particularly in the areas of research and development, foreign direct investment and technology transfer.

The experts noted several difficulties in undertaking such a broad-ranging research project. In some cases historical data was not available, or existed only in an unusable format. In some participating countries, there were not enough examples of certain types of industry to provide statistically meaningful data. In these cases, it was necessary to reduce the number of different industrial sectors included in the research.

During the panel discussion, several participants emphasized that developing countries often lack the means, in terms both of capital and of commercial expertise, to take innovations through from research and development, to patent filing and commercialization. Many developing countries also lack technology incubators or venture capitalists, which might help them better exploit their own technological advancements and innovations. Speakers highlighted the need, within the context of the United Nation’s Millennium Goals, to assist developing countries in creating an environment conducive to innovation and investment, so as to maximize the economic benefits from domestic technological innovation and the IP system. 

WIPO plans to publish the results of the research project by the end of the year.

Report by Allan Roach, WIPO Japan Office

The WIPO Magazine is intended to help broaden public understanding of intellectual property and of WIPO’s work, and is not an official document of WIPO. The designations employed and the presentation of material throughout this publication do not imply the expression of any opinion whatsoever on the part of WIPO concerning the legal status of any country, territory or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. This publication is not intended to reflect the views of the Member States or the WIPO Secretariat. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by WIPO in preference to others of a similar nature that are not mentioned.