National Seminar on Intellectual Property and its Impact on Economic Development

1. National Seminar on Intellectual Property and its Impact on Economic Development The Role of Intellectual Property in Promoting International Trade and Facilitating Investment Minsk November 24 and 25, 2004

2. IPRs IN THE WORLD ECONOMY • Globalization of world economy and liberalization of trade and investment • Increase in bilateral and multilateral trade and investment agreements • Increasing costs of R & D • Emergence of a knowledge based economy • Expansion of trade and change in composition

3. Composition of World Trade(percentages)

4. Worldwide Patent Filing - Trends(‘000 )

5. The New Imperative • Not merely to preserve market exclusivity but to build strategic partnerships • IP assets - investment, not business costs • Maintain and audit portfolio to • maximize return on investment at least risk • access technology and markets • promote trade and • enhance competitiveness

6. Economic Growth and Technology Ideal Growth Path GDP High GDPHigh S&T High GDPLow S&T Low GDPLow S&T Low GDPHigh S&T Country S&T

7. Growth Competitiveness Index CoreNon-Core Three Variables : 25% 25% 50% 33% 33% 33% • 1. Public Institutions • Protection of rights • Resolution of disputes • Efficiency / transparency • 2.Macro Economic Environment • Monetary and fiscal policies • 3. TechnologyWithout tech progress can accumulate capital but not sustainable growth

8. How is Technology Obtained • Core Innovation • Technological Diffusion

9. R & D Expenditures Industrialized Countries : US$ 583 billion Developing Countries : US$ 57 billion

10. Technological Diffusion • Rapid growth if successful in adopting/adapting foreign technologies • FDI - effective way of technology transfer and facilitated by the domestic environment • Size of the market • Stability of macro economic policies • Free repatriation of profits and dividends • Guarantees against nationalization • Protection of Intellectual Property Rights

11. Survey - Protection of IPRs and Decisions on FDI By type of Industry By type of Investment

12. Chemicals IndustryResponse for making investments in manufacturing and R&D facilities

13. Patents and Technological Development • Facilitate trade and investment • Disseminate initial knowledge as free input (“public good”) to produce further knowledge as output (“private good”) • Limit “free riders” not “innovators” • Encourage licensing arrangements • Catalyze new technologies and businesses • Ex: Cuba

15. Importance of Trademarks • Marketing strategy - differentiate products from those of rivals and develop longer-term/emotional relationships with customers • Attempt to move customers from • brand awareness, via • brand recognition, to • brand preference, and finally to • brand insistence

16. Marks, Economic Value and Trade • Increase sales volumes and price • Stabilize demand through consumer relationships • Earn royalties - licensing and franchising • Transfer brand equity to new product categories

17. Value of Mark in Total Value of Firm

18. Brand Values ( US $ billion)

19. Contribution of CR Industry • Core industry : • creation of products or works • Industries partly covered by CR • manufacturing, business practices • Distribution • transport, bookshops, record stores • CR related industry • production and tech assistance with equipment- computers, radios, TV

20. Share in Development • US • 5 % of GDP • 3.24 % of employment • MERCOSUR • 6 % of GDP • 4 % of employment

21. World Music Sales • Sales Drop: • Germany - 20% • France - 14% • BE, DK, GR, • IE, PT, SE, CH >10% • Cuts in jobs and marketing expenditures, winnowing repertoires of poorly selling artists • Peer-to-peer file sharing • 7.4 m daily users • download 410 m files per day as against legit sales of 5 m units

22. Projections $ 3600m in sales $ 6200m in economic activity $ 590m in tax 104,000 jobs $ 480m in sales $ 820m in economic activity $ 80m in tax 13,000 jobs China Software Industry 10% decrease in piracy

23. Thank you