IPR and economic development are linked in complex ways. For developed "Northern" countries that innovate, stronger IPR protection benefits them by protecting innovations. However, for developing "Southern" countries, the impacts are more ambiguous as stronger IPR can either help or hinder depending on how technology is transferred between North and South through trade, foreign direct investment, or licensing. Overall, weak IPR protection may better facilitate technology transfer and learning in less developed countries in the early stages of industrialization through imitation and reverse engineering.

1. IPR and Economic
Development
Ashutosh Sharma

2. Meaning of both the terms
IPR (Intellectual Property Rights)

3. IPR consists of Patents, designs, copyrights,
trade secrets and geographical indications
which provide the foundation for building and
extending markets for new technologies

4. What comes under IPR
 Patent : is a monopoly right to the exclusive use of
invention, granted to inventor or his assignee. This
right is granted only for a limited period i.e. called the
term of patent.
 Trademarks : is a visual symbol in the form of word,
device, character attached to the goods for indicating
their trade origin.
 Geographical indications: Qualities & characteristics
of certain goods attributable to some geographical
locations and reputable to as producer of certain
items come under GI. (Oranges & Tea)

5. Legislations on IPR in INDIA
 The Patents Act, 1970 (2005)
 The Designs Act, 2000
 The Trade Marks Act, 1999
 The Geographical Indications of Goods Act,
1999
 The Copyright Act, 1957 (2000)

6. Economic Development
Economic development is the increase in the
standard of living in a nation's population with
sustained growth from a simple, low-income
economy to a modern, high-income economy.

7. Link Between the two terms

8. IPR could well increase economic growth and foster
beneficial technical change, thereby improving
development prospects, if they are structured in a
manner that promotes effective and dynamic
competition .

9. How IPR helps in Economic
Development
Intellectual property rights could play a significant
role in encouraging innovation, product development,
and technical change to help in development of the
economy through low-cost imitation of foreign
products and technologies. However, inadequate
IPR could stifle technical change even at low levels
of economic development because much invention
and product innovation are aimed at local markets
and could benefit from domestic protection of
patents, utility models, and trade secrets.

10. Example
Japanese patent system (JPS) affected postwar
Japanese technical progress, as measured by
increases in total factor productivity (TFP). The JPS
in place over the estimation period 1960-1993
evidently was designed to encourage incremental
and adaptive innovation and diffusion of technical
knowledge into the economy. That is they created
new technology (in the form of IPR) that helped the
Japanese economy to cover the post war losses.

11. Scenario for Poor Nations
Recent studies suggest that innovation through
product development and entry of new firms is
motivated in part by trademark protection, even in
poor nations that helps their economy to grow. As
poor nations does not have the required resources
and infrastructure to support and do innovations
which are treated as IPR.

12. It is widely recognized by economists that imports of goods and
services could transfer and diffuse technology. Imports of
capital goods and technical inputs could directly reduce
production costs and raise productivity for the developed
countries by outsourcing the required services from low income
countries. this benefit would depend on the technological
content of imports, suggesting that close trade linkages with
innovative developed economies could engender considerable
productivity gains through trade flows.

13. IPR and Economic Development
and

14. There are two types of countries:
a developed, innovating" North” and a developing, imitating
“South”, then the impact of stronger IPR protection benefits
the innovating North, but its impact in the South where
innovation is limited or non-existent is ambiguous, depending
on the channels through which technology is transferred.
Research indicates that stronger IPR protection is only found
to benefit the South when R&D is highly productive, thus
resulting in significant cost reductions, and when the South
comprises a large share of the overall market of the product.

15. Ways through which IPR helps in
Economic Development
Trade channel
When technology is transferred through trade, then successful
southern imitation results in shifting the competitive advantage
for the production of imitated products from the North to the
South.

16. Foreign direct investment channel
When foreign direct investment (FDI) is considered as a source
of technology transfer, northern innovators may shift production
to the South, reducing competition for resources in the North .
Licensing channel
If technology is transferred through licensing, stronger IPR
protection in the South results in greater innovation in the
North, and increased licensing to the South. Licensing has the
advantage to northern firms of higher profits due to lower
production costs in the South, but involves other costs in terms
of contract negotiations, transferring the necessary technology
and in the rents that the innovator must give to the licensee to
discourage imitation.

17. Conclusion
Strong IPR protection will hinder rather than facilitate
technology transfer and indigenous learning activities in the
early stages of industrialization, when learning takes place
through reverse engineering and duplicative imitation of
mature foreign products. It is only after countries have
accumulated sufficient indigenous capabilities and an
extensive science and technology infrastructure capable of
undertaking creative imitation that IPR protection becomes an
important element in technology transfer and industrial
activities. Similarly, the development experience of India
indicates the importance of weak IPR protection in building up
local capabilities, even when countries are at very low levels
of development.