Of Clusters and Assumptions: Innovation as Part of a Full TRIPS Implementation

Abstract

Because TRIPS introduced a high(er) level of intellectual property protection in a number of developing countries, it provides an opportunity to examine the impact of the introduction of (property) rights on a variety of intangibles in legal systems from which those rights were absent. One question is whether, and if so how, 18th century European rules, updated in concert with other Western nations until 1989, can be successfully integrated into the social, cultural, economic and legal fabric of dozens of developing nations, and how success is measured in that context. TRIPS also allows us to consider the impact of high(er) levels of intellectual property protection on economic activity. The welfare costs associated with the introduction of higher intellectual property protection are well known. Instead of focusing only on the welfare costs (or “ip negatives”), this paper asks, if intellectual property is an ingredient of the innovation recipe, what are the other ingredients and how should they be used? The paper considers development economics and its study of the ip/investment/intellectual property nexus, and consider insights from other social scientists on innovation and creativity and how those might inform our conclusions and recommendations to developing nations, and our understanding of the success of some of them at the global innovation game. The paper also looks at work done on National Innovation Systems (NIS) and, indirectly, the contribution of systems theory to our understanding of how intellectual property and innovation interrelate.

Keywords: TRIPS Agreement, development, national innovation systems, foreign direct investment

JEL Classification: K33