Intellectual Property Rights and Economic Growth Essays

2406 Words Dec 28th, 2014 10 Pages
Intellectual Property Rights and Economic growth

“Imagination is more important than knowledge” – Albert Einstein
Albert Einstein’s preference of imagination over knowledge speaks well to the potential capabilities of enterprises and businesses. If a creative idea is discovered, it can be transformed into innovative products. Innovation is instrumental among other things in creating new jobs, providing higher incomes, offering investment opportunities and curing disease. “There is wide agreement that innovation and entrepreneurial activity are the engines of long-run economic growth” (Hill 63). Intellectual property rights have become a significant factor in both creating and using ideas that are translated into knowledge and
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If one’s invention could simply be copied by others, there would be less innovation as no one would be willing to shell out large amounts of money or even aspire to develop new products, technologies, and processes. The stronger the IPR protection, the more monetary rewards can be recouped by the innovator and more innovation tends to occur.
Why is innovation important to economic growth?
One might ask why innovation is important to economic growth? “Innovation and entrepreneurial activity help to increase economic activity by creating new products and markets that did not previously exist. Moreover, innovation in production and business processes lead to an increase in productivity of labour and capital, which further boosts economic growth rates” (Hill 63).
What are the costs to countries where counterfeiting take place. “The protection of intellectual property protection rights differs greatly from country to country. Although many countries have stringent intellectual property regulations on their books, the enforcement of these regulations has often been lax” (Hill 54). To have intellectual property rights in and of its self is not enough. They have to be enforced. In order to determine the benefits of intellectual property protection rights for developing countries, we must also look at the costs to countries where counterfeiting is prevalent and where there is weak enforcement or weak intellectual property protection rights.

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