Participants attending the 6th COMESA Annual Research Forum in Nairobi, Kenya, in a group photograph.
Africa Industry

Stringent Intellectual Property Rights Impede Innovations in Trade

COMESA countries and policymakers should be cautious when it comes to instituting regulations which emphasize stringent Intellectual Property Rights (IPR).

According to research findings presented at the 6th COMESA Annual Research Forum in Nairobi, Kenya, strong IPR may harm research which leads to innovation in developing countries.

The research titled ‘Intellectual Property Rights, Innovation and Trade in Developing Countries: Evidence from COMESA Countries’ was conducted by Professor Albert Makochekanwa of the Department of Economics at the University of Zimbabwe. It found that countries in the region lacked enough motivations to spur innovations.

According to empirical research cited by the researcher, innovation activities are mainly driven by the possibility of increased profits and market share; the perceived demand for new products and processes and “technology-push” factors that are related to advancements in technology and science.

The study investigated the role of IPRs protection in innovations using 12 developing countries in COMESA for which data was available, covering the period 2012 to 2017.

These are: Egypt, Eswatini, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Seychelles, Tunisia, Uganda, Zambia and Zimbabwe.

Arising from the study Prof. Makochekanwa observed that regional countries did not meet the threshold for stringent IPR given their level of development. This is due to the low level of technological development, the high cost of research and development, and the competitiveness of the economy in the global marketplace.

During discussions, researchers at the Forum observed that developed economies, such as Japan and Germany, used flexible or relaxed IPR when they were developing after the World War and only introduced stringent regulations after attaining higher levels of development.

Reacting to the presentation, COMESA Senior Research Fellow Benedict Musengele observed:

“Developing economies rely much on imitation of technologies as well as technology transfer for their innovations, economic growth and development, which is hindered by stringent IPR.

“Most of the innovation in developing countries is by the small and medium enterprises which have no capacity to register and acquire licenses for the intellectual property rights but they need to be nurtured to grow and become large enterprises.”

Further, empirical evidence shows that robust economic activities and manufacturing production stimulates innovation while vibrant economic activity implies profitability, thus encouraging innovation activities by firms.

In addition, political stability provides confidence to firms to easily engage in research and development which yields new ideas, products and processes even in the long run without fear of possible expropriation or loss due to potential risks emanating from political challenges.

The findings demonstrated that stronger IPRs protection overall discourages or negatively impact on innovations. In the case of COMESA, this finding provides evidence to the fact that IPR discourages innovation.

This was one of the 13 research papers being presented at the one-week research forum, under the theme: “Promoting Intra-COMESA Trade through Innovation”, whose implications will be presented to COMESA policy organs and form the basis for policy decision making.

Given the level of development across the member states, the researcher recommended that the regional countries and policymakers consider relaxed, as opposed to stringent IPR regulations in the spirit of encouraging innovation activities and economic development in member countries.