Transcript Toward a data collection & research agenda to promote inclusive innovation and growth Objective: to understand how the IP-SMEs nexus matters for.

Toward a data collection & research agenda
to promote inclusive innovation and growth
Objective: to understand how the IP-SMEs nexus matters for inclusive growth,
and the policy implications thereof…
Mark Dutz
WIPO Expert Group Meeting, Geneva, September 17-18, 2009
Overview of presentation
1. India’s context as motivation (WHY)
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Economic dualism
Productivity dispersion
Inclusive innovation
2. Enabling environment for innovation (WHAT)
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Competition as key spur to innovation
Skills and absorptive capacity
Targeted policy options for inclusive innovation
3. Complementary strategies (HOW)
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Asking the right questions
Connecting datasets, projects, institutions and researchers
1. Broad definition of inclusive innovation:
creation & absorption relevant for the poor
CREATION &
COMMERCIALIZATION
Shifting out the global
frontier of knowledge
Product
Innovation
Process
Innovation
Organizational
Innovation
Sustainable and Inclusive Growth
DIFFUSION &
ABSORPTION
Moving toward the
global frontier of
knowledge
Inclusive innovation is needed to respond
to the reality of dual economies
Context
 Nuclear and space power
 Top innovation player
Challenge
 Pro-growth competitiveness agenda
11% of
employment
89%
Context
 1/4 of population below poverty
 70% rural, 46% of women illiterate
Challenge
 Pro-poor inclusiveness agenda
Formal
Sector
Informal
Sector
2. IP-SMEs as one part of a broad
enabling environment
INCREASED PRODUCTIVITY & WELFARE THROUGH BROAD INNOVATION
KNOWLEDGE
KNOWLEDGE
CREATION AND
DIFFUSION AND
COMMERCIALIZATION
INCLUSIVE
ABSORPTION
INNOVATION
ENABLING ENVIRONMENT
COMPETITION
SKILLS AND
INFORMATION
INNOVATION
EDUCATION
INFRASTRUCTURE
FINANCE
Components of
enabling environment
Creation and
commercialization of
new knowledge
Diffusion and
absorption of existing
knowledge in new
locations
Broader investment
climate
Policies
Institutions
 Policies to promote more
private R&D
o
IPR regime
o
Matching grants
o
Tax subsidies
 Public spending on R&D
o
National mission
programs
o
Competitive grants
o
Peer reviews
 Pro-innovation public
procurement
 Support for pro-poor
innovations
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 Openness to global
knowledge flows
o
Trade
o
FDI & JVs
o
Technology
licensing policy
o
Internet access
 Foreign education and
attracting the diaspora
o
Cross-border flows
o
Betw. FDI subsid.
and local firms
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 Competition and trade
 Regulatory policies,
especially toward
infrastructure
 Entrepreneurship support
 Good rule of law
 Macroeconomic stability
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Public labs, universities
Private R&D labs
IPR institutions
Technology transfer offices
Science and technology parks
Technology incubators
Research and education
networks
Specialized nongovernmental
institutions
Grassroots networks
Early-stage technology
development finance and
venture capital
Technical information
services
Technology upgrading
Productivity organizations
Metrology, standards, testing,
and quality control systems
National research and
education networks
Networks at cluster level
Technology absorption
finance for micro, small,
and medium enterprises
Efficient financial system
Flexible labor market
Effective courts and judiciary
Market-responsive formal
education institutions and
lifelong learning system
Capabilities
 High-level human
capital for R&D
(scientists,
engineers,
technicians)
 Technoentrepreneurship
 Formal education
and skills
 Engineering
consulting firms
 Business support
services
 Literacy
 Secondary and
higher education
graduates
 Managers
 Entrepreneurs
Competition is critical for innovation:
Pharma industry success story
U.S. Drug Patents Granted By Grant Year
80
70
Number of Patents
60
50
China
India
40
30
20
10
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
• TRIPS provided “stick” by foreclosing growth thru simple imitation in developing country weak patent
markets, providing imperative to seek new opportunities
• trade/FDI reform and devaluation in early 90s reinforced attractiveness of process innovation “carrot”: relaxed
regulatory hurdles of US generics market (& bulk drugs), from Hatch-Waxman Act of 1984
• future: from “upgrading of manufacturing & process R&D capabilities” to “more substantive product
development”?
(see Ashish Arora et al., “Strong Medicine? Patent Reform and the Transformation of the Indian Pharmaceutical
Industry”, mimeo, July 2008)
To spur experimentation & risk-taking,
reform bankruptcy for easier re-entry
Recovery Rates when Closing a Business (cents on $)
Brazil
17.1
Russia
28.2
India
10.4
China
35.3
Korea, Rep
80.5
Mexico
64.2
OECD
68.6
0
10
20
30
40
50
60
70
80
90
• increase competition & innovation by reforming bankruptcy process
To promote continuous learning,
invest more for in-service training
% Formal Manufacturing Firms offering In-Service Training
Brazil (2003)
59.1%
Russia (2005)
57.9%
India (2006)
These
firms are
25% more
productive
15.6%
China (2003)
92.4%
Korea, Rep.(2005)
42.3%
0%
20%
40%
60%
80%
100%
Percent (%)
• increase quality and quantity of education and training to increase skills
Targeted policy options to make innovation work
better for all, with IP-SME components
(1) Formal creation activities
 Soft loans & matching grant support for R&D
 Public procurement to raise demand for innovation
(2) Hi-tech & grassroots commercialization
 Advisory services to make start-ups “VC-ready”
 Support for early-stage Venture Capital funding
 Special IPRs for traditional/grassroots knowledge?
(3) Absorption of knowledge by enterprises
 Cluster-based technology upgrading
 Diaspora mobilization
(1) Enhance commercially-driven R&D
Strengthen & scale-up existing programs thru risksharing competitive matching grant funding & PPPs:
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Appropriate technologies: program for individual SMEs or
collaborations for pro-growth or inclusive projects, building on
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•
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SPREAD (ICICI’s Sponsored R&D program, 89/02)
PRDSF (DST’s Pharmaceutical R&D Support Fund, 04)
SBIRI (DBT’s Small Business Innovation Research Initiative, 06)
Frontier technologies: program for consortia of firms, R&D
labs and universities, building on
•
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NMITLI (CSIR’s New Millennium Indian Technology Leadership
Initiative, 03)
OSDD (CSIR’s Open Source Drug Discovery consortium, 08)
(2) Promote commercialization
Build early-stage technology-oriented companies
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Hi-tech ventures from R&D labs, universities and others
Rural grassroots informal business ventures
Deal flow support services: increase quality and volume
of deal flow thru support to “Tech Assistance Companies”
services include technology/market assessment, business plan
formulation, testing/validation, market linkage development,
and legal advice on IP strategy (+ PFCs, TTOs, IP support,
subsidies for foreign filings)
Risk capital finance: SPV to manage 2 kinds of funds-offunds for demonstration impact
FOF Tech: investments in advanced technology ventures
(building on APIDC, GVFL, ICICI Knowledge Park Fund, etc.)
FOF BOP: riskier investments in ventures to benefit the poor
(building on Aavishkaar, Acumen Fund, Soros/Omidyar/Google
SME Fund, etc.)
(3) Help firms better absorb knowledge
Introduce institutionalized “strategic” pilots (scalable, with clear
governance and accountability structures to spur learning)
based on search networks (to unblock constraints to development)
beneficiaries re-assemble existing programs (to meet local
needs)
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supported by bottom-up contests for matching grants
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Support SME-led cluster initiatives
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Matching grants to strengthen technology upgrading initiatives
(building on MSME’s Micro and Small Enterprises Cluster
Development Program)
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Improve access to global knowledge
Matching grants to strengthen capabilities of diaspora networks
(building on the Overseas Indian Facilitation Centre, a PPP between
the Ministry of Overseas Indian Affairs and the Confed. of Indian
Industries)
3. “What we measure affects what we do… with
wrong measures, we strive for the wrong things”
Toward better measures
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It’s all about implementation: How best to measure de facto
enforcement of IP across countries? (vs de jure rules)
It’s not no. of patents but commercializable value generated
Better diffusion of existing knowledge is critical: do stronger
IPs facilitate better diffusion? (e.g. patent disclosures used?)
How assess impact of S&T capabilities on IP-SME outcomes?
What are best metrics of inclusive innovation & creativity by
SMEs spurred by IP?
Data-based evaluation of policy outcomes
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Evidence-based assessment of what works and doesn’t: what
are most compelling success stories?
Ex-ante: Include elements of randomized field trials
(treatment vs control group) in programs
Ex-post: Conduct regular, independent evaluations with
international benchmarking
3. “What we measure affects what we do… with
wrong measures, we strive for the wrong things”
Toward better measures





It’s all about implementation: How best to measure de facto
enforcement of IP across countries? (vs de jure rules)
It’s not no. of patents but commercializable value generated
Better diffusion of existing knowledge is critical: do stronger
IPs facilitate better diffusion? (e.g. patent disclosures used?)
How assess impact of S&T capabilities on IP-SME outcomes?
What are best metrics of inclusive innovation & creativity by
SMEs spurred by IP?
Data-based evaluation of policy outcomes



Evidence-based assessment of what works and doesn’t: what
are most compelling success stories?
Ex-ante: Include elements of randomized field trials
(treatment vs control group) in programs
Ex-post: Conduct regular, independent evaluations with
international benchmarking
3. “What we measure affects what we do… with
wrong measures, we strive for the wrong things”
Toward better measures





It’s all about implementation: How best to measure de facto
enforcement of IP across countries? (vs de jure rules)
It’s not no. of patents but commercializable value generated
Better diffusion of existing knowledge is critical: do stronger
IPs facilitate better diffusion? (e.g. patent disclosures used?)
How assess impact of S&T capabilities on IP-SME outcomes?
What are best metrics of inclusive innovation & creativity by
SMEs spurred by IP?
Data-based evaluation of policy outcomes



Evidence-based assessment of what works and doesn’t: what
are most compelling success stories?
Ex-ante: Include elements of randomized field trials
(treatment vs control group) in programs
Ex-post: Conduct regular, independent evaluations with
international benchmarking
The more technologically advanced developing
countries are good candidates for initial studies…
Science and Technology Capabilities
2000 Counts and Ratios
R&D Personnel
Max. #
Per
Countries Count 1,000
Country Group
Reporting (000s) People
Developing Countries
88
71.8
1.17
Asian tigers
4
68.0
3.48
Emerging 8
8
311.6 1.61
Other
76
14.1
0.78
Developed Countries
26
199.0 5.43
Full Sample
114
118.4 2.73
Tertiary Students
% Gross
Count Enrollm.
(000s) Rate
757 18.2%
1,097 49.7%
4,041 27.8%
378 15.2%
1,254 52.0%
873 26.2%
PCs
Internet Users
Per
Per
Count 100 Count 100
(000s) People (000s) People
1,418
4.7
1,191 3.9
7,096 37.8 7,114 32.3
6,879
5.1
5,834 4.0
483
2.8
390
2.4
13,087 34.8 10,921 30.1
4,201 11.9 3,410 9.9
• Asian tigers = Taiwan (70,643), So.Korea (57,968), Singapore (4,097), Hong Kong
(3,805)
• Emerging 8 = China (5,162), India (4,080), So.Africa (3,976), Hungary (2,871),
Mexico (2,509), Russia (2,409), Brazil (2,094), Argentina (1,249)
- cumulative patents granted in US to end-08 in parentheses
…because they reap the shorter-term benefits
of a stronger IP regime
Summary Table: Impact of Strengthened Patent Protection in Developing Countries
Outcome Variable
Technology Transfer through
FDI:
U.S. stocks
Alliances: R&D alliances
Local Innovation through
Patents: EPO applications
USPTO grants
Coinvention filings
Coinvention grants
R&D:
Expenditures
Country Groups across all sectors
Sector Groups
All
Asian Emerging
Other
Medical Pharma
developing tigers
8
developing industries sector Other
x
x
xx
X
XXX
X
X
XXX
XXX
XXX
XXX
XX
XXX
XXX
xxx
xxx
x
XXX
XXX
xxx
X
xxx
xxx
XXX
x
Note: XXX=IP index has at least 1% level of statistical significance in both "all countries" and "developing
countries" samples, XX=at least 5% in both, X=at least 10% in both; xxx=at least 1% level of statistical
significane in one of the two samples, xx=at least 5% in one, x=at least 10% in one. For Sector Groups, we only
report XXX, XX and X as there is only one set of regressions for developing countries for each outcome.
Possible initiatives: Connecting datasets,
projects, institutions and researchers
Start by focusing on a few advanced MICs
Begin where most likely to find solid results
Connect existing firm-level datasets with IP filings data
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India: Prowess database maintained by CMIE (Dutta and Sharma, 09)
Sri Lanka: SL Longitudinal Survey of Enterprises (de Mel et al., 09)
WB Enterprise Surveys: approx 60 countries with R&D data (Sharma, 07)
Set up collaborative web site and link in-country researchers
across a few initial target countries, together with policy
implementers not just from Patent and Trademark Offices but
Ministries of Economy, Industry, S&T, etc.
Partner with 2-3 ongoing SME-focused projects to sharpen
project evaluation and continuous improvement, and
add/strengthen IP-SME dimension of projects (& complements)
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India: SBIRI (DBT, MOST); IIT Mumbai business incubator; Technology
Upgrading Program (TIFAC, MOST & MSME); Patent Facilitating Center and
20+ PICs (TIFAC); The Center for Genomic Application (PPP R&D center)…
So. Africa: Automotive Component Supplier Development Program (DTI)