Intellectual Property Rights, Innovation and Development: Is Asia Different?

For decades, economic policymakers in developing countries have resisted pressure to strengthen their intellectual property rights (IPR) systems. Many of them have pointed to the success of high-tech industries in Asia as confirmation of the view that keeping IPR systems weak at certain stages of economic development can function as an infant industry policy, stimulating the growth of technologically dynamic indigenous firms. This essay reviews recent econometric evidence on how changes in the IPR policy impact industrial development, and concludes that much of that evidence suggests that stronger IPR systems accelerate industrial development. The study then examines whether the lessons of Asia economic history really contradict that econometric evidence. The view presented here is that Asia is not really different. The current challenges faced by Asian firms in technologically dynamic industries suggest that long periods of industrial development under weak IPR systems can create problems that emerge in the longer run.