This approach will improve global vaccination and encourage long-term growth, as well as knowledge and technology transfer.
Technology breakthroughs are a valuable resource in the digital world and have shaped how companies function and do business.
Moderna, an American biotechnology company, will open its first production plant in Africa in Kenya to make messenger RNA (mRNA) vaccines. The expenditure is estimated to be more than $500 million (Sh56.5 billion).
This approach will improve global vaccination and encourage long-term growth, as well as knowledge and technology transfer, as biotech companies face increasing pressure to share their expertise with manufacturers in global south countries.
Technology breakthroughs are a valuable resource in the digital world and have shaped how companies function and do business. However, they are likely to be replicated and infringed upon.
Thus, enters Intellectual Property Rights, which allow inventors to acquire a competitive edge in the marketplace by compensating them for their invention through remuneration for their research and development investment.
Therefore, adequate and effective protection supports development and knowledge transfer in poor nations. Whereas poor safeguards contribute to technological spillovers by local enterprises, extreme protections lead to insufficient knowledge diffusion which reduces the rate of innovation growth.
As a result, the choice of intellectual property protection is contingent on a country's long-term innovation, development and capabilities.
In industrialised countries, strong intellectual property protection is the norm and developing countries should embrace weaker protections for rapid knowledge diffusion.
In view of that, technology transfer (ToT) occurs through both official and informal routes. Trade, licensing, joint ventures, franchising, foreign patenting, and foreign direct investment (FDI) are examples of formal channels, while imitation and technological spillover are examples of informal channels.
Proprietary protection is of secondary importance for firms considering making investments in emerging countries that receive large investment inflows.
Pragmatically, foreign entities prefer setting up Research & Development centres in nations having stronger protections while setting up sales and distribution centres in countries having weaker protections.
Thus, decisions on FDI depend on market size, easy availability of resources, skilled labor, market opportunities, and production costs. FDI is a key source of technology dissemination channels which may result in spillover advantages for domestic businesses.
Due to the substantial expenses involved, the majority of enterprises with complex technologies and differentiated goods choose FDI above any other method.
Consequently, better safeguards reduce the danger of technology leakage and boost technology licensing, whereas weaker protections discourage FDI; as a result, nations with stronger protections see more international inflows.
On the other hand, licensing is another method of transferring technology. Licences can be paid in the form of a fee, royalty, or profit-sharing arrangement, and they grant the right to produce or manufacture a product for a set length of time in a specific region. When it comes to low-tech products, licensing is more common than FDI.
Stronger safeguards can lower licensing costs and give the licensor more market power. It, on the other hand, hinders market innovation.
Intellectual property protection provides an incentive for inventors to innovate and promotes long-term growth. In its absence, certain incentives to innovate may exist, depending on market lead time and the difficulty of replicating technical characteristics.
Nonetheless, excessive protection might lead to a lack of information distribution and stifle innovation growth. Weak safeguards on the other hand, may result in foreign enterprises growing cold feet over certain markets.
As a result, companies that invest extensively in R&D frequently encourage governments to enhance their proprietary system.
As a consequence, intellectual property rights aid in fostering innovation and technological dissemination. There is a direct link between intellectual property rights and growth, as proprietary rights are bound to impact commerce, resulting in increased trade flows for high-tech companies.
Mutua K Mutuku, data compliance & intellectual property law expert
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