Economic role in the new Global Economy essay

The first part of this work focuses on intellectual property, its definition, its role in society and the things which it brings along on its wake. This work also contains some explanations as to why intellectual property must be protected to ensure the economic development of an enterprise, why and how it affects world economy and some recommendations as to what things are needed to be accomplished in order for it to thrive. The second part contains some analysis and examples which illustrates as to how rights to intellectual property affect an industry’s growth and its impact on the economy of the country affected.

Lastly, this works also contains some recommendations as to what the international community needs to do in order to ensure the growth of investments into thriving enterprises. II. Introduction Intellectual Property has a significant role in maintaining order in the global economy. New products are appearing left and right as a result of man’s resourcefulness, all of it are modified versions or upgraded versions of a previous prototype.

It is perhaps man’s nature to perpetually seek to undo what he has contrived in the past either for his comfort or simply to prove that he has better intellectual faculties than another. This unquenchable thirst to “make better things” or to “make new ideas” is the driving force which led to the concept of Intellectual property. The scope of Intellectual Property is very broad, it may cover both tangible and intangible things, the only requisite being that it should be a thing conceptualized by the human mind or human hands.

Intellectual property plays an important role in an increasingly broad range of areas, ranging from the Internet to health care to nearly all aspects of science and technology and literature and the arts. There are two known categories of Intellectual property, namely: Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs.

Understanding the role of intellectual property in these areas – many of them still emerging – often requires significant new research and study. Because of this practically broad subject line, It has become necessary for man to regulate its various forms. The Unquenchable thirst of man to make or modify things made Intellectual property a major factor in day to day business decisions. The influx is very immense, making it quite necessary for man to come up with something to govern this large torrent of ideas in order to avoid unfair and unethical work practices.

The said balance which governs man and his urge to create, is what we now term as intellectual property law. Intellectual property law is defined as “the legal regulations governing an individual’s or an organization’s right to control the use or dissemination of ideas or information. It is a legal concept which deals with creations of human ingenuity”. It is characterized by its ability to rapidly evolve and adapt.

Intellectual property as viewed from the legal standpoint is an intangible creation of the human mind, usually expressed or translated into a tangible form. It should be noted that utilizing ideas or concepts which are not written down or recorded by any means is of course not a within the context of the law which pertains to a form of infringement which may cause reprisals. Intellectual property rights is primarily a tool of economic policy, its scope and procedures have attracted a wide range of economic analysis over the past quarter-century.

It must be noted that adequate protection of an individual or company’s intellectual property is a crucial step in deterring potential infringement and helps encourage further innovation in whatever form it may be. If left alone, a good invention or creation may be lost due to infringement by larger competitors that are in a better economical position to mass produce the thing or service at a more reasonable price, this phenomena would undoubtedly leave the original creator without any financial benefit or even a recognition of his genius.

Hence the term “Intellectual Property law” was put in effect to govern and lend a semblance of order to the “unseemingly limitless” influx of creations made by man. Intellectual Property law, according to Donald Chisum and Michael Jacobs is “An important factor, which stimulates intellectual property development and would lead to additional availability of venture capital. The respect for intellectual property rights in general, leads to mitigation of risks”.

They also opined that Reinforcing and broadening the rights provided to holders of intellectual property have resulted in increasing their value to enterprises. This, in turn, has helped venture capitalists to see potential returns for their investments which would in turn lead to more innovations and growth in various markets. ” There are a lot of legislations and treaties which specifically addresses relevant procedures, conventions, and standards for each area within the scope of intellectual property like copyright or trade secrets.

A Copyright is defined as “a protection that covers published and unpublished literary, scientific and artistic works, whatever the form of expression, provided such works are fixed in a tangible or material form”. This means that if a thing is visible to Man’s senses (sight, hearing, touch) then the protection provided for by a copyright may be granted unto it, provided of course that the creator registers the same. III. Analysis : The effect of Intellectual Property on Global Economy Over the years, the existence of Intellectual property rights, has led to the economic growth and stabilization of markets.

Its exclusive use has a great impact in the competition in the present Global Market. When investors see growing markets, they initiate moves to attain the possible benefits which could be associated with the said growth. The ability to exercise market power stems from the demand for the merchandise. Because of this an effective management for a company’s Intellectual Property resource must be enabled to allow them to maximize their intellectual property assets and improve the level of their competitiveness and strategic advantage.

It is of utmost importance that such step be taken since an effective management means more than just protecting an enterprise’s inventions, trademarks, designs, or copyright, This also involves a company’s ability to commercialize such inventions, market its brands, license its know-how, conclude joint ventures and other contractual agreements involving the Company’s Intellectual Property, and effectively monitor and enforce its intellectual property rights.

High growth industries that are contributing to both developed and developing economies, such as the biotech and information technology sectors, are heavily dependent on the intellectual property system. The information technology industry alone employs more than 9 million people, raises more than US $700 billion in taxes per year, and grew by 26% between 1996-2000, creating 2. 6 million new jobs and contributing US $6 trillion to economies worldwide.

15 Revenues from the US biotechnology industry increased from $8 billion in 1992 to $39.2 billion in 2003, and the industry employed 198,300 people as of 31 December 2003 This data concludes that the present age is a witness to the strings being pulled by IPR to the global economy. Technological advancement gave rise to numerous creations which of course requires legal protection. Without Legal protection, intellectual piracy would ensue from almost all angles. Even on the advent of laws created to safeguard intellectual property, there is still a great impact caused by intellectual property theft. The damages suffered on some instances proved to be on the heavy side.

For instance, the software and movie industries are undoubtedly guilds which could dictate the rise and fall of economies all over the world, since almost everyone patronize or rely heavily on them. According to Faisal Mufti in his work “Software piracy remains an unresolved problem”, He mentioned that: “The scarcity of foreign and local investment in the software industry is the direct outcome of rampant piracy. No investor in his right mind will invest in software sector in a country as long as the market is so un-conducive for legal software business”.

An article created by Mike Ellis, Senior VP and Asia Pacific Regional Director, Motion Picture Association (MPA) mentions that A recent global study which examined the impact of motion picture piracy and consumer behavior underscored the importance of intellectual property to economic growth worldwide and revealed the extent of damage caused by copyright theft to creative industries all around the world. The study, undertaken by the independent research firm LEK Consulting on behalf of the MPA which represents major US motion picture companies, showed that Internet piracy cost the film industry globally US$7.1 billion of potential revenue in 2005.

These inferences lead to the dismaying fact that compliance with software licensing is at risk of being considered an economic luxury that can be abandoned at any time. Similar problems exist in China, as found in a second survey conducted by Keith E. Maskus, Professor of Economics in the University of Colorado, it was found out that trademark infringement negatively affected innovative Chinese enterprises. The establishment of brand recognition in China requires costly investments in marketing and distribution channels.

Enterprises that achieved this status quickly found their trademarks applied to counterfeit products. Such products were of lower quality and damaged the reputation of the legitimate enterprise. The said predicament almost always led to the closure of the enterprise or abandonment of their trademark. This event had a deterrent effect on enterprise development and effectively prevented interregional marketing. In turn, enterprises were less able to achieve economies of scale.