Intellectual property rights (IPRs)—the copyrights, patents, trademarks, and other similar rights that underpin the majority of creative and innovative products and services—play a critical role in helping developed and developing countries around the world grow their economies, spur innovation, provide large and small businesses with a variety of tools to help them succeed, and benefit consumers.
In various fields of technology, information, and culture, governments across the world are seeking for methods to enhance their economies, assist their populations, and create national skills. Companies and industries in the private sector are also seeking for more competitive methods to thrive by creating and implementing innovative and helpful innovations into products and services that we all benefit from and enjoy in almost every aspect of life.
As a result, we may argue that IPR has two major economic purposes in today’s world. The first is to encourage investments in research and development as well as commercial innovation by granting exclusive rights to use and sell newly created technology, commodities, and services. The second objective is to encourage or require rights holders to put their innovations and ideas on the market in order to foster widespread diffusion of new information.
KEYWORDS – IPR, Underpins, Creativity, Innovation, Economic Growth.
Intellectual property rights are critical to a country’s development. Every country’s intellectual property legislation is distinct. The strong implementation of the IPR function contributes significantly to economic growth in many industrialised nations. Intellectual property rights encourage innovation, which leads to economic prosperity. Every firm in the world today is the result of innovation. The relevance of IPR laws has been recognised in the modern period. In today’s world, it is not just innovation that matters, but also the name. The name has a lot of goodwill attached to it. Some businesses just sell their brand name for a large sum of money.
Now, before we get into the specific benefits that IPR delivers, let’s define IPR. IPR oversees any basic development of human insight, such as artistic, academic, specialised, or logical growth. The creator’s lawful rights to validate their invention are granted under Intellectual Property Rights (IPRs). These legal rights provide the creator/producer or the administrator of the development/item a limited right to use it for a limited period.
Also, according to article 2 of the WIPO (World Intellectual Property Organization), which is the Central Organization for the Protection of Intellectual Property Laws and the master association of the UN, Intellectual Property will include the rights identifying with abstract, creative, and logical works, developments in all fields of human endeavour, logical disclosures, modern structures, telecommunications, and computer software.
When it comes to the protection of intellectual property rights, India has well-established administrative, legislative, and judicial systems. India must implement the appropriate legislation to comply with the Trade-Related Intellectual Property Rights Agreement (TRIPS). Trademarks, copyrights, patents, and geographic indications of origin are all examples of intellectual property rights.
ECONOMIC BENEFIT TO THE COUNTRY
- IPR PROMOTES INNOVATION
The detrimental impact of free – riding on invention is one of the most important reasons for ensuring that ideas receive legal protection in the form of IPR. Since the 1960s, economists have known that business has a built-in propensity to under-invest in R&D in order to meet society’s demands, due to enterprises’ difficulty appropriating the economic advantages of their inventions.
Inventions, creative works, brands, and other valuable intangibles are what economists refer to as “non-rival” and “non-excludable”—that is, if they are not protected by legal rights, they can and will be used fairly easily by market competitors (or anyone else) and cannot be easily defended against imitators. Without IPR, a small technology developer in India, for example, could not prevent global competitors from simply expropriating and profiting from its ideas.
Simply put, companies that are not adequately compensated as a result of such free-riding have little motivation to invest in R&D and other innovative and creative activities. IPR provides inventive businesses and people with the financial incentives they need to create socially acceptable new technologies. It does this through a set of legal rights granted to writers, inventors, brand owners, and others, allowing them to control if and how their inventive works, inventions, brands, and other intangible innovations are utilised.
- HELPS FIRMS TO MONETIZE THEIR INNOVATIONS AND GROW –
IP’s role as an “intellectual currency”—a system for pricing and exchanging otherwise intangible ideas, works, and brands—provides businesses with a plethora of options for monetizing their discoveries. “The bricks and mortar economy is… being replaced by the economy of ideas, in which IP has become one of the primary currencies,” as the World Intellectual Property Organization phrased it so eloquently.
Wealth is created and captured in the new economy through producing and capturing knowledge’s value. The possession of tangible goods has been the basis of prosperity throughout human civilization’s history. The paradigm has shifted now, and information has replaced money as the new riches.
- Protecting investment and market value – A company’s ownership of intellectual property rights reassures investors that they should invest in the company. The use of IP to encourage investment is critical not just for existing businesses that rely on patents, trademarks, and copyrights to preserve their value, innovation, and reputation, but also for emerging businesses looking to ensure a steady supply of capital and innovation.
- Creating new marketplaces – IP rights do not have to be locked up in a company’s vault, but may and are actively exploited by inventive companies to build new and profitable markets, goods, services, and processes in a variety of strategic ways. As a result, IP-based goods and services create revenue for the company.
- HELPS SMALL AND MEDIUM ENTERPRISES –
Large companies, according to traditional economic theory and empirical studies, are a major source of innovation because they have more funding to devote to research and development (R&D), greater ability to take risks associated with innovative activity, better economies of scale, and thus a lower marginal cost of innovation than small businesses. In most OECD nations, however, the overall percentage of economic activity attributed to SMEs has risen in recent years.
- SMEs are increasingly investing in research and development. Between 1985 and 1995, SME R&D investment in the United States increased by approximately 300 percent, whereas big company R&D expenditure increased by only around 20 percent.
- The return on R&D investment of SMEs typically outperforms that of major corporations. In the late 1990s, the R&D-to-sales ratio of SMEs in the United States was 3.9 percent, compared to 3.1 percent for the largest firms, and had improved significantly over the preceding decade.
- Small businesses are responsible for a disproportionate amount of new product development. This is due in part to the fact that SMEs can (and often must) keep R&D costs low. SMEs in the United States and other nations have been found to generate 2.4 times more inventions per employee than major corporations, according to a number of metrics of innovation.
- IPR BENEFITS CONSUMERS AND SOCIETY
Through the broad diversity of products and services created on the basis of IP protection, consumers and society benefit from the IPR system. Some of society’s most urgent needs, such as health care and the environment, rely heavily on IP for new solutions, as does improved contact with the government and with one another in the “digital economy.” IPR not only aids in the delivery of such solutions, but also—in the case of trademarked brands—assists in the provision of better ‘signals’ between seller and buyer, allowing consumers to have a better understanding of what they are purchasing, thereby assisting in the closer alignment of business and consumer needs. IP protection also protects customers against low-quality and potentially deadly counterfeits, as well as consumer job losses and wider economic harm.
IPR BENEFITS THE ECONOMY OF COUNTRY
All these benefits add in the economic growth of a country as – The GDP contribution, employment, and trade benefits of healthy IP-based industries are more essential than ever as governments strive to stabilise their economies and encourage economic development. The World Intellectual Property Organization (WIPO), the European Union, and a number of individual nations have assessed the importance of IP-based sectors to national and regional economies –
Copyright-based industries and interdependent sectors account for around 4-11 percent of GDP in the G8 countries—3.4 percent in Japan, 4.7 percent in Canada, 6.06 percent in Russia, 6.9 percent in the EU, and 11.09 percent in the US These industries also generate a significant number of jobs, accounting for around 3–8% of total employment in the G8—3.0% of total domestic employment in Japan, 5.4 percent in Canada, 6.5 percent in the EU, 7.3 percent in Russia, and 8.53 percent in the United States.
These figures are based on data from nine key copyright industries that are entirely dedicated to the production, manufacturing, and/or sale or other distribution of copyright-related content. Press and literature, music, theatrical performances, and operas, as well as cinema and television, are among them.
According to WEF surveys, intellectual property protection is one of the main national “institutions” through which individuals, businesses, and governments interact to produce revenue and wealth in the economy. As the ICC has previously said, nations believed to have the greatest intellectual property protection are consistently judged to be among the most economically competitive countries in WEF surveys. Those deemed to have the poorest intellectual property regimes tend to rank at the bottom in terms of growth and competitiveness. Therefore, one could say that Intellectual property rights could be a powerful tool for promoting innovation, product development, and technological advancement. IPRS systems in developing nations tend to encourage information dissemination through low-cost imitations of Western items and technology. To become competitive, businesses in developing nations must generally embrace new management and organisational methods, as well as quality control procedures that can significantly increase production. These investments are expensive, but they offer a high social return since they are necessary for bringing productivity up to global standards.
Furthermore, IPRS has the potential to encourage new businesses and entrepreneurs to be more creative and risk-taking. Countries with lax standards risk being reliant on inefficient, dynamically unproductive businesses that rely on counterfeiting and copying. It may also encourage more R&D geared on fulfilling the requirements of emerging countries.