The Fourth Industrial Revolution, Development and Intellectual Property - the World Economic and Social Survey 2018 and Beyond

Abstract

The chapter calls for a rethinking of the trade-off between innovation and diffusion, with the focus on revisiting the current intellectual property (IP) institutions against the backdrop of the Fourth Industrial Revolution and sustainable development. The contention is underpinned by two observations. First, a review of empirical evidence has generally failed to find much effect of IP institutions, notably patents, on innovation – the raison d’etre of IP. While the incentivizing effect of IP on any given innovator’s R&D activities is indisputable, its effect on system-wide innovation could be counteracted by several factors. These include the adverse effects of IP institutions on innovation diffusion, follow-up innovations and competition, which could be partly attributed to the lack of clear boundaries of IP and the absence of efficient and liquid IP markets. As will be discussed in this chapter, these effects will likely become more salient in the Fourth Industrial Revolution. Secondly, the increasingly restrictive global intellectual property rights (IPR) regime poses significant challenges to countries, especially developing ones, in accessing frontier technologies and fully participating in the Fourth Industrial Revolution, which would in all likelihood lead to greater technology and development gaps. It may also lead to failures in addressing global problems such as climate change due to the under-utilization of technologies that could provide effective solutions if appropriately diffused. This chapter concludes with a discussion on some of the options to revamp the market-based IP institutions that are directed at exclusivity and ownership, as well as alternative incentive mechanisms that seek to enable a wider diffusion of technologies without hampering innovation efforts.