Activities 2006 - European Academy of Sciences and Arts

Activities 2006 - European Academy of Sciences and Arts


In the GATT/TRIPS context, the impact of IP on investment in research gets apparent.

However, in order to properly understand the impact of the entire system, a variety of factors

should be taken into account as decisive for a positive development, like high IP protection

standards, a liberalized commodity and IP world markets, low labour and regulatory

costs, a reliable judiciary, a predictable stable political environment and a well-functioning

of the educational system. The more emerging markets develop under the

GATT/TRIPS regime, the more irresistible it is for multinationals to relocate R & D and production

operations. China, Taiwan, and India can give prominent examples for this trend.

They have massively increased their exports and improved local R & D skills. The Tiger

States of South-East Asia have successfully coped with globalisation and thereby can

massively narrow the welfare gap.

J. Straus continued by referring to China and India as examples of developing countries

which experienced progress in the GATT/TRIPS context. Therefore, he looked at the development

of a series of relevant factors like the number of scientific and R & D personnel,

the distribution of R & D personnel among research institutes and enterprises, the investment

in research and finally the number of patent applications and issued patents over the

last years.

The number of scientific and R & D personnel increased significantly in China: for scientific

and technological personnel from 50.000 in 1950, through 1.37 million in 1978, to then

2.17 million in 2002 and for R & D personnel from 781.000 in 1986 to 1.035.000 in 2002.

While in 1990 over 40 percent of them were employed at research institutes, in 1999 more

than 40 percent of them were now working for enterprises, which is a clear shift of the distribution

of R & D personnel from public research institutes to the private sector. From 1985

to 2002 the investment in research more than doubled in percentage of GDP and increased

continuously to USD 69 billion in 2003. Summing up, all of these factors clearly show

a positive development of R & D activities in China.

This fits perfectly with the thesis that when production is transferred, R & D closely follows,

and ultimately production skills might eventually be lost in the home country of the firms.

K. Dam annotated that this is not necessarily the case, but instead new markets also need

new products, which are not needed in the home country of the company, and then produce

new research activities that would not have been needed otherwise. But R.

Wieczorek emphasised that in spite of this fact, R & D is tightly connected in many branches

to production, and therefore if production is moved, R & D will follow.

In fact, the number of patent applications submitted in China in 2005 increased as well by

over 30 percent in comparison with 2004, with a stronger participation of domestic rather

than foreign applicants. The number of issued patents also grew about 12 percent, again

with a focus on domestic patents. F. Gurry added that not only an increase in volume, but

an internationalisation is visible as well.

Regarding India, the FDI in the years 2001-2002 increased by 65 percent to USD 3.91 billion,

which ranks number 7 in the world; also the textile exports, and the turnover in the IT

technologies increased enormously by two-third due to exports and a further sharp rise is


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