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The weak ‘I’ in India; country underperforms on innovation, investment and competition

Last month, the US Chamber released the fifth edition of the International Intellectual Property (IP) Index, which benchmarks IP standards in 45 economies around the world.

US Chamber, International Intellectual Property, IP Index, IP standards, National Intellectual Property Rights Policy in 2016, IP rights, IPR Strategy
Last month, the US Chamber released the fifth edition of the International Intellectual Property (IP) Index, which benchmarks IP standards in 45 economies around the world. (Source: Reuters)

Last month, the US Chamber released the fifth edition of the International Intellectual Property (IP) Index, which benchmarks IP standards in 45 economies around the world. In this edition of the index, India places third from the bottom—though an improvement on last year’s performance, this is in large part due to the addition of new economies to the index, some with weaker performance than India in certain areas.

In fact, for all intents and purposes, India did not make many actual improvements to its national IP environment. On the contrary, a number of developments have had a pronounced negative impact. One example is the recent High Court of Delhi decision regarding photocopying copyrighted content. What is more, despite the Indian government’s issuing of the National Intellectual Property Rights Policy in  2016, IP-intensive industries continue to face major challenges, not least with regard to Section 3(d) of the Indian Patents Act and the scope of patentability for life sciences and computer-implemented inventions.

But the index scores and rankings themselves are not the endgame. Neither is IP protection itself. The goal of IP protection globally and in individual economies—India among them—is to secure innovation and competitiveness, and the socio-economic transformation these provide.

One can debate the validity of a given index and ranking on IP rights—whether it is the IP Index or another measure—but the fact remains, the true test of India’s IP framework is the extent to which it is delivering on the country’s innovation and competitiveness goals. In the Make-in-India Strategy from 2014, the Modi administration clearly identified the growth of India’s local high-tech sectors through foreign investment and increased domestic research and development as a key priority.

Yet, after two years, India still underperforms on different metrics of innovation, investment and competitiveness. For instance, India exhibits just 60% of the knowledge and technology outputs that one of its peers, China, does, as measured by the 2016 Global Innovation Index’s Innovation Output Sub-Index. And while still low, China attracts double the amount of biomedical investment in terms of clinical trial activity compared to India (which, though rising, displays a rate of just over 2 trials registered in the international database Clinicaltrials.gov per million people). For its part, despite facing critical challenges in its IP-related laws and enforcement, China’s IP framework provides patenting fundamentals that are missing or uncertain in India’s IP framework.

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Indeed, one common denominator of economies that do exhibit high rates of investment and innovative output is a supportive IP environment. In fact, of the 21 socio-economic indicators examined in the statistical annex of the IP Index in 2017—ranging from R&D to job growth to access to technologies—they all display a strong correlation (having a correlation strength of 0.6 or above) with the index scores. And digging into these correlations, it is clear that even an incremental improvement in IP protection can yield economic rewards and allow economies to progress toward strategic goals.

The recent National IPR Strategy was a missed opportunity to resolve the statutory and legal uncertainty undermining India’s ability to strengthen innovation and competitiveness. The IP Index presents a playbook of measures that, when taken, will support India’s ability to secure its socio- economic goals. What matters is whether India will keep its eye on these goals and go the full distance to secure them.

– Meir Perez Pugatch
The author is a professor of intellectual property, innovation and entrepreneurship at the University of Maastricht and managing director of  Pugatch Consilium. Views are personal.

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