INNOVATION, PATENTS AND ECONOMIC GROWTH - Innovation in the Biopharmaceutical Industry - page 66

that generate innovation, create new technologies, and encourage adoption of
these new technologies grow faster than those that do not. Innovation is singled
out as the likely factor that drives long-term productivity and economic growth
(OECD, 2003, 2005a, c). Patents, one form of intellectual property (IP), 1 and the
focus of this paper, are one of the most commonly used measures of innovation
output.
For many industries, especially those that are Research and Development (R&D)
intensive, IP is the key building block for product development and a critical deter-
minant for investment decisions. An environment that safeguards IP encourages
inventors and organisations to invest resources in R&D for technological inno-
vation. In some industries patenting is identified as the most important means of
protecting IP and is increasingly used as a strategic asset by companies to create sus-
tainable competitive advantage — although, in others, secrecy is used to safeguard
proprietary knowledge.
The importance of IP and patents is now widely recognised. For example the
Lisbon Agenda has explicitly stressed the importance of innovation and IP for the
European Union to meet its objective to become the most competitive knowledge-
based economy in the world by 2010 (Commission of the European Communities,
2002). As with the EU, many countries are actively pursuing policies to develop
appropriate IP infrastructures, as these are seen to be critical to business inno-
vation, competition and economic growth. But as this paper will demonstrate,
the extent to which effective policies are developed and the success of execu-
tion vary.
This paper draws on a review of published evidence and company case studies to
explore the evidence linking innovation, IP, competitiveness and economic growth.
The paper analyses policy initiatives in the US, Japan, China and the EU aimed at
improving innovation, IP management and competitiveness. Through case studies,
it illustrates successful strategies pursued by businesses to harness IP in order to
enhance innovation and competitiveness. The paper concludes by discussing policy
implications of these findings.
Patents and Intellectual Property
Broadly speaking, IP rights are legally enforceable rights relating to creations of
the mind and include inventions, literary and artistic works, and symbols, names,
images and designs used in commerce. A number of individual rights are covered
by IP. Some of the most important are patents, trademarks, copyrights, designs and
1 Others include trade marks, copyrights, designs, smells and trade secrets but are not discussed in
this paper.