South-South Collaboration Needs Promotion, Better Reach, UNCTAD Report Says

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South-South trade and investment is growing and could lead to greater technology sharing but some countries are left out, particularly least developed countries, due to lack of technological capacity, according to a new United Nations report that also looked at intellectual property in the context of the rising South-South collaboration. Separately, UNCTAD also has begun consultations on joint work with the World Intellectual Property Organization.

The United Nations Conference on Trade and Development (UNCTAD) this week launched the 2012 edition of its technology and innovation report, with a particular focus on South-South collaboration.

According to the report, exchanges between developing countries accounted for 55 percent of global trade in 2010. Technology and innovation are key building blocks of sustainable development, UNCTAD Deputy Secretary-General Petko Draganov said during a press briefing on 25 October. Starting in the 1960s, several East Asian countries were able to achieve rapid industrialisation partly through the implementation of policies facilitating the acquisition of technologies and development innovation capabilities, he said. More recently, a new wave of countries such as Brazil, India and China has “embarked on a steady path of industrial catch-up.”

The 2012 technology and innovation report looks at how South-South cooperation could help developing countries breach the technological divide and promote inclusive growth through industrialisation, Draganov said. The report focuses on how technological learning and innovation capacity can be promoted across the developing world as a whole, he added.

The South can be an important partner to promote technology and innovation capacity in the developing world for two reasons, he said. First, “policy experiences of other developing countries in fostering innovation capacities can be relevant for countries that are still grappling with ways to create coherent innovation and industrial policy environments.” Secondly, the technology employed in other countries of the South may be more suitable for developing countries’ local needs and conditions.

Developing countries have already become major partners of other developing countries for trade and manufacturing goods, including high technology products. However, the trends are highly uneven across regions, according to Draganov, with Asian countries accounting for more than 80 percent of the South-South exports and intra-Asian exports accounting for 74 percent of the total South-South trade.

Many other developing countries and in particular least developed countries (LDCs) continue to face major challenges in using South-South trade and investment to build technological capabilities and promote structural change, he said.

The 2012 report proposes a set of five principles around which a framework of South-South collaboration for technology and innovation can be structured. They are:

- Integrate the technological needs of developing countries and LDCs into South-South exchanges
- Share and better integrate lessons learned from ongoing catch-up experiences of other developing countries in building innovation capabilities through proactive policies
- Promote technological learning in particular through alliances and technology transfer initiatives
- Make South-South foreign direct investment more technology oriented
- Pool resources of developing countries to address common technological challenges

The report offers concrete policy measures not meant to be part of a binding framework for developing countries but more likely to be used as facilitating the emergence of mutually beneficial patterns and engagements, Draganov said.

Intellectual Property in Context of South-South Collaboration

Padmashree Gehl-Sampath, chief of the Technology and Innovation Report Task Force in the UNCTAD Division on Technology and Logistics, said at the briefing that the report provides an analysis of intellectual property rights in the context of South-South collaboration, from different angles.

For example, she said, the report looks at how the intellectual property rights restrictions lead to more South-South technological collaboration. Restrictions on a number of developing countries to produce in the pharmaceutical sector, for example, have been a catalyst in enabling technical collaboration with many least developed countries where such pharmaceutical production is still possible, she said.

An illustration of such occurrence provided in the report is the case of a joint venture between the Ugandan firm Quality Chemicals and the Indian pharmaceutical company CIPLA.

According to Gehl-Sampath, the report looked at emerging countries, such as Brazil and India, which have used particular ways of dealing with IP rules under the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This might have specific policy learning implications for other developing countries, she said.

Some countries, such as Korea and Taiwan, have used utility models as a “policy incentive to encourage local firms to invest scarce capital in reverse engineering for technological learning,” said the report. A utility model is an exclusive right granted for an invention, with less stringent requirements than for a patent, such as a milder requirement for “inventive step”. It is granted for a shorter period of time than a patent, according to a World Intellectual Property Organization definition.

UNCTAD and WIPO Meet on IP Issues

WIPO and UNCTAD are planning to strengthen their collaboration on intellectual property related issues through regular meetings, according to UNCTAD. The first of those meetings was held on 17 October at WIPO.

According to UNCTAD, following the UNCTAD 13th ministerial conference in Doha, WIPO “has proposed the establishment of a regular consultation mechanism between the two organizations at the level of Deputy Secretary-General and Deputy Director General” to consult and coordinate on issues of “mutual interest.”

This consultation mechanism “represents an important milestone” in following up Recommendation 40 of the WIPO Development Agenda, according to UNCTAD. Recommendation 40 requests WIPO to intensify its cooperation on IP-related issues with United Nations agencies, in particular UNCTAD and other intergovernmental agencies. The mechanism also answers paragraph 18 of the UNCTAD Doha Mandate, asking that UNCTAD “enhance synergies and promote complementarities with other international organizations.”

The 17 October meeting focused in particular on entrepreneurship and technology transfer, the interface between intellectual property policy and competition policy, and the least developed countries priority needs assessments for submission to the WTO Council on TRIPS, which meets next week.

Catherine Saez may be reached at info@ip-watch.ch.

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