The objective of this paper is to provide an analytical overview of how economic development may be hindered or promoted for an effective system of Intellectual Property Rights. It helps us to understand how the protection of Intellectual Property Rights will lead to development in the economy. Our empirical results show that the protection of Intellectual Property Rights positively affects economic development by attracting foreign technology embodied in capital goods. At last the paper is concluded by defining how Intellectual Property Rights leads to the development of the economy.
IPR is termed as Intellectual Property Rights. It is referred as a general term for task of property rights through licenses, copyrights, and trademarks. It means it gives the creator legitimate rights to verify their creations. It also provides foundation for buildings and extending market for new technologies. It can be termed as brand, invention, design, or creations which a person or business has some legal right over. The main aim of Intellectual Property Rights is to protect one’s hard labor and provide incentive to inventors for making an invention to gain out of it. However the government should definitely strike out balance otherwise it will lead to disaster because the aim of the Intellectual Property Rights is not only to benefit inventors but also to benefit the public of nation and also to contribute to country’s economic development.
Economic Development is a normative concept i.e., it applies in context of people’s sense of morality (right and wrong, good, and bad). The definition of Economic Development given by Michael Todaro is an increase in the living standards, improvement in self-esteem needs and freedom from oppression as well as a great choice. It can be termed as increase in one’s standard of living with sustained growth from simple, low income economy to modern, high income economy in nation’s population.
The significance of Intellectual Property Rights in economic development differs from country to country. It can be derived that it depends on the amount of resources countries devoted to creating intellectual asset as well as amount of protected knowledge and the information used in the production and consumption. If IPR is structured in such a manner that it promotes effective and dynamic competition. It can also increase the economic growth and foster beneficial technical changes which leads to improvement of development prospects.
What Comes Under IPR?
● Patent: It is a monopoly right to exclusive use of invention, granted to inventor or his assignee. It is granted for a certain period which is called as term of patent.
● Trademark: It is visual symbol used in form of a word or character attached to the good for indicating its origin.
● Geographical Indications: Characteristics of some goods attributable to certain geographical locations and reputable as producer of certain items which comes under Geographical Indications. (Orange and Tea)
● Copyrights: It gives legal protection to authors for their original works of authorship- software (code), books, plays, compositions.
How IPR Helps in Economic Development:
It can be said that IPR plays a major role in supporting the changes which are often required to help in economic development through low cost impression of foreign products and technologies. However, if the IPR is deficient it could curb the technical changes even at the low level of development of economy and this will be happening because most of the inventions and product inventions are aimed at local market.
Ways by Which IPR Helps in Economic Development:
- When the technologies are transferred through trade then a fortunate southern imitation resulting in shift in competitive advantage to produce imitated products from north to south.
- When the FDI (Foreign Direct Investment) is considered as the origin of the transfer of the technologies, then the northern innovators may shift the production to south, thereby reducing the competition for resources in north.
- Also, when the technologies are transferred through licensing there is strong IPR protection in south which results in great innovation in north with an increase in licensing in south.
IPR In Open and Closed Trade Regimes
Trade Regimes also influences the relation between Intellectual Property Rights and Economic Development. In the Open Trade Regime, the role of the Intellectual Property and Innovation is very great which thereby leads to higher economic development. It can be said that there exists a positive relation between Economic development, Intellectual Property Rights, and the openness in the Trade Regime. Open trade encourages the countries to exchange at a high real rate as compared to closed trade regimes. Therefore, it can be clearly seen that Intellectual Property Rights alone does not lead to economic development some way or the other openness and closeness of trade regimes also plays a major role in economic development.
Protection of IPR
The protection of Intellectual Property plays a major role in economic development. Only those countries have higher growth rate who protects their Intellectual Property. When we protect the Intellectual Property Rights, it gives a great help in reduction of risk of infringement of invention. It also simplifies trade-off for the countries. Therefore, it can be said that the growth of the economy is largely determined on Innovations. And as the innovation flows from invention, the policy makers go through big concern whether strong protection of Intellectual Property will stimulate growth in countries. Therefore, the role of the Intellectual Property Rights is examined considering Economic Development. Wherein the cross-country on data protection, trade regime is taken care to find whether the economic development is slowing down due to protection of Intellectual Property Rights which happens mostly in closed economy rather in open economy.
Need for Protection of IPR
Few purposes behind protecting innovation are: –
● Progress of the mankind stays in capacity to make new works in field of innovation and culture.
● Intellectual Property supports the production, dispersion, and divulgence of the creation to great population.
● Advancement and security of the licensed innovation advances the monetary advancement which leads to creation of new openings and business and improves personal satisfaction.
● Therefore, the licensed innovation helps in adjustment between pioneer’s advantages and open intrigue, thereby giving a situation where development can prosper and profit everyone.
Economic Effects of IPR Protection
The protection of Intellectual Property Rights is considered as a part of Economic Development. It effects the incentive for the creation of new knowledge and information. It concludes for the diffusion of knowledge and information within and across the economies.
From the facts above stated, it can be concluded that a strong Intellectual Property Rights leads to a great economic development. We can also say that Intellectual Property Rights either plays a negative or a positive part in improvement and development of economy. In order of development of the economy the protection of the Intellectual property rights is becoming increasingly relevant to policy makers. Moreover, as for a closed economy, competitions would be very less variable as the main aim is to control market share in such economy. If there is economic growth that will be due to advancement in technology which has originated within such economy but that growth rate would be very less as compared to growth rate of the open market due to the competitive forces stimulating innovation.
Q.1. What is meant by Intellectual Property Rights?
Intellectual Property Rights are granted to the creators of Intellectual Property for their new or original ideas by the respective governments. Intellectual Property Rights cannot be used without the permission of government.
Q.2. Are the rights of Intellectual Property territorial in nature?
Yes, Intellectual Property Rights are territorial in nature. It means that Indian registration is valid only in India. In other country, separate protection had to be sought under relevant law.
Q.3. How Intellectual Property Rights leads in Economic Development?
Intellectual Property Rights plays a major role in economic development. If the Intellectual Property Rights are structured in such a way that it promotes effective and dynamic competition, it will foster beneficial technical changes thereby leading to economic development.
Q.4. Why Intellectual Property Rights need Protection?
Intellectual Property Rights require protection as it supports the production, dispersion, and divulgence of the creation to great population.
Q.5. What are the economic effects of Intellectual Property Rights?
Intellectual Property Rights effects the incentive for the creation of new knowledge and information. It concludes for the diffusion of knowledge and information within and across the economies.