phelps25_FABRICE COFFRINI_AFP_Getty Images

The Need for a Global Patent Market

Productivity growth, typically driven by technological progress, has been sluggish for more than 50 years. But a rules-based global trade system for intellectual property could go a long way toward reinvigorating it, by driving more specialization and cross-border cooperation among the world's inventors.

NEW YORK – If developed and developing countries’ national patent systems were integrated into the trade system, the result would be greater specialization among inventors and, with it, faster technological invention and productivity growth. Yet under current arrangements, World Trade Organization (WTO) member states do not honor foreign inventors’ claims to their own inventions. More than ever, the world needs a new framework of trade rules to facilitate the exchange of human ideas across borders.

Economic growth is essentially driven by growth in productivity, which, in turn, is driven by the creation of new technologies. In today’s world, such innovations are increasingly being developed as a result of coordination among inventors across companies and countries. Yet productivity growth has been sluggish for more than 50 years, owing significantly to gaps in trade rules, intellectual-property mercantilism through “forced technology transfer,” and the weakening of national patent systems. These factors have shut out grassroots inventors. The current environment admits only powerful players, effectively excluding millions of ideas from global markets.

Clearly, a more cooperative strategy is needed.We believe that a framework of cross-border technological exchange based on patent protection and enforcement mechanisms can release the creativity of developed and developing economies alike. With the right rules, a non-discriminatory, open market for patented technology – as in the 1883 Paris Convention for the Protection of Industrial Property – would create incentives for more cross-border collaboration.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/GyZ5NKQ