Innovation is a main driver for economic growth and development for developing countries, said speakers at an event focusing on innovation in Brazil, India and South Africa. But although innovation is increasing and is a priority in developing economies, one expert said invention capabilities remain in the hands of historical players and governments need to seek innovative policy responses.

The 15 July event, organised by the International Centre for Trade and Sustainable Development, the Brazilian Centre for International Relations, Prospectiva Consulting, and the Brazil Institute of the Woodrow Wilson International Center for Scholars, aimed to provide a platform to discuss innovation policies and strategies in a changing global landscape.

The role of innovation is growing and considered a component of success in Brazil, India and South Africa, three major emerging economies, speakers said, with national policy responses to encourage innovation and to build an adequate framework to promote and sustain it.

However, innovation is not only about technical innovation but also the diffusion of new products and services, said Ambassador Roberto Azevedo of the Brazilian mission in Geneva. Innovation policy schemes have to be tailored to the specific characteristics of each country and take into account several factors, such as the state of technology and the phenomenon of “brain drain.”

In Brazil, promoting innovation is a public policy priority, said Rafael Oliva, advisor to the presidency at the Brazilian Development Bank, a federal public company. The participation of the Brazilian government in research and development (R&D) is considerable, and the goal is to both increase innovative activities in Brazil on a systematic basis, and consolidate the country’s culture of innovation.

IP Rights after Public Interest

“The most controversial issue from the global perspective appears to be the intellectual property rights,” Azevedo said. “The core issue is to know to what extent IP rights promote or hinder access to technology and how the current patent system can be exploited to accommodate the needs and interests of developing countries,” he added.

Reconciling the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) implementation in developing countries with their national innovation policies is a challenge, Azevedo said, and developing countries “should not refrain from adopting measures to protect and promote public interest” by using flexibilities allowed by TRIPS, such as Article 7 on technology transfer and dissemination, or Article 29 on disclosure in patent applications.

“TRIPS is about rights on the one hand and obligations on the other hand,” he said. Disclosure, technology transfer and dissemination are obligations that are inscribed in TRIPS, he said. The obligation side of TRIPS is not receiving the attention it deserves, and developing countries, which need innovation, should focus on ensuring obligations are fulfilled, according to Avezedo.

Article 7 states: “The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.”

Article 29 states: “Members shall require that an applicant for a patent shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for carrying out the invention known to the inventor at the filing date or, where priority is claimed, at the priority date of the application. Members may require an applicant for a patent to provide information concerning the applicant’s corresponding foreign applications and grants.”

India, meanwhile, has established a very clear strategy on innovation, said N.N. Prasad, a former senior Indian official on IP policy, now chief of staff to the director general at the World Intellectual Property Organization. The Indian intellectual property regime encourages innovative creativity, provides a legal and administrative framework for the protection of IP rights, and at the same time offers balanced and effective use of IP, he said, speaking of his time with the Indian government.

“India wants to meet all its international obligations” but also means to safeguard national interests. The country is modernising its IP regime and tries to create awareness and sensitise the public about intellectual property, which suffers, according to Prasad, from misconception. The first phase of the modernisation process led to a substantial increase of patents and trademark registration and to a decrease in the average registration time, he said.

The India Patent Act seeks to balance IP protection with public health, national security, and public interests concerns. Among the safeguards is Article 3(d), which provides exemption from patentability to provide [Correction: prevent] patent evergreening, the effective extension of an existing patent by obtaining a new patent on an incremental change. “India wants genuine inventions and genuine R&D,” he said.

Another safeguard lies in the provisions in the Indian law to deal with national emergency, extreme urgency and public non-commercial use under special circumstances, which allow the country to issue a compulsory licence. “We have no intention to use compulsory licences to circumvent IP obligations but only to deal with national emergencies … when it comes to lives, IP should not get in the way,” he said.

Knowledge is the basic form of capital for innovation, said Yonah Seleti, director general of the Department of Science and Technology in Pretoria, South Africa. The country has launched a 10-year national innovation plan (2008-2018) which focuses on the knowledge economy. Seleti described the knowledge economy as having four pillars: An economic and institutional regime, education, innovation, and information infrastructure, all of which should be interconnected and interdependent.

Seleti called for more nationally focused innovation. “There is an innovation chasm, with an insufficient number of research products directly influencing the real economy,” he said, adding that “Sciences must relate to the social imperatives of society.”

Dominique Foray, chair in economics and management of innovation at the Ecole Polytechnique of Lausanne said that developing countries need “smart specialisation.” They need to correlate the specialisation of their economy with R&D specialisations. There is a need to support locally oriented innovation, and it should be widely distributed over the whole spectrum of economic activities, across sectors and different types of innovation. Countries should try to characterise the best areas of research to serve local interests and needs first, he said.

An example of smart specialisation is biofuels in Brazil, he said.

Brazil is the second world producer of ethanol said Sérgio Queiroz, special advisor for technological innovation at the State of São Paulo Research Foundation. The country has been “planting fuel” since 1975 and in 2003, more that 90 percent of new cars were using gasoline and biofuel.

He said ethanol from sugar cane provides a high yield per hectare, a good energy balance (the energy output compared to fossil energy imput), and is sustainable since only 1 percent of the total arable land in Brazil is devoted to the culture of ethanol sugar cane.

Innovation has allowed a dropping of ethanol prices. Brazil now plans on working with other potential producers to transfer technology and use cooperative R&D. The most probable producers are Latin America and Africa, Queiroz said.

Invention Capabilities Still Geographically Polarised

If innovation capabilities are improving in developing countries, the trend is still slow and localised, Foray said adding that there is a “remarkable persistence of the distribution of invention capabilities.” A shift can be expected, he said, but “in many years.”

For example, in software research, the inventive activity continues to be concentrated in the United States. This country has two major assets: an important pool of highly skilled programmers and software designers, and the proximity to lead users, he said.

The “development” part of R&D, such as clinical trials or software development is globally shifting but it mainly happens on segments that use large amount of relatively low-skilled labour and does not need to be tightly integrated with other R&D, according to Foray, and developing countries should focus on building up their development capacity rather than giving too much importance to frontier technology research fields.

Countries should develop their own “critical mass” of academic science and complementary infrastructure to achieve significant relocation of core R&D efforts. They should also focus their attention to areas with growth opportunities, high potential for innovation and spillover to other areas, he said.

Concerning IP, “there is no constant best form of IP institutions,” he said. Mixed solutions should be found, supporting both radical innovations by global players and adaptation by local entrepreneurs. For example, “reverse engineering still needs to be promoted as an efficient way to learn the state of the art,” adding that “TRIPS is not enough and not a priority for most countries.”