Tuesday, February 10, 2015

GIPC Releases International IP Index and the US is on Top

On February 4th, the Global IP Center at the US Chamber of Commerce released its 3rd edition of the International IP Index. The Index scores 30 countries, representing 80 percent of the world’s gross domestic product, between 0 and 1 for 30 indicators across six separate categories. The six categories are: 
  • Patents, Related Rights, and Limitations
  • Copyrights, Related Rights, and Limitations
  • Trademarks, Related Rights, and Limitations
  • Trade Secrets and Market Access
  • Enforcement
  • Membership and Ratification of International Treaties
The United States scored the highest with a 28.53 (out of 30) followed by the United Kingdom and Germany with scores of 27.61 and 27.28, respectively. The countries with the lowest scores were Vietnam, India, and Thailand at 7.84, 7.23, and 7.1, respectively.

The index also found some interesting correlations concerning strong IP rights across all countries:
  • Strong IP rights and research and development (R&D) expenditure: Companies in economies with advanced IP systems are 40% more likely to invest in R&D.
  • Strong IP rights and high-value job growth: Economies with favorable IP regimes employ more than half their workforce in knowledge-intensive sectors.
  • Strong IP rights and foreign direct investment (FDI): Strong IP protections in the life sciences sector account for 40% of life sciences investment. Additionally, economies with beneficial IP protection see 9–10 times more life sciences investment than economies with weak IP protections.
  • Strong IP rights and innovative activity: Economies with robust IP environments yield 50% more innovative output compared with economies with IP regimes in need of improvement.
The United States is certainly a world leader with respect to IP rights and enforcement. But while the United States is at the top of the index, it would be better off if all countries caught up to its leadership in IP. In fact, the entire global economy is better off when developing countries adopt stronger IP policies, because strong institutions, such as IP, have a positive externality on the global economy. When one country adopts stronger IP rights, it makes its surrounding countries and trading partners better off, because it encourages more innovation and more economic activity. Even if one country has weak IP rights protections, it can import goods from a country with strong IP rights, which will hopefully lead to better policies as the benefits from strong IP rights are realized. Thus, the gains from global trade are much higher in a world with robust IP rights.

The Ambassador of the Republic of Singapore to the US, H.E. Ashok Kumar Mirpuri, stated during the ceremony at which the index was released that policymakers should use the index as a guide for how their country can improve. The index provides sound analysis for areas in which specific countries can gain ground in coming years, and it shows as 20 of the 30 countries improved their score over the past year.
The data shows that strong IP protections incentivize investment in R&D, innovation, and creative content, because entrepreneurs can earn a return on their labor and ideas. In turn, this means that economies can grow and prosper if individuals have the ability and incentives to provide valuable goods and services for consumers.
Hopefully we will see even higher scores next year!