The Fastest Growing Emerging Economies Are Also Those With The Weakest IP Laws

from the like-exactly-the-opposite-of-the-talking-points-no-one-believes-anyway dept

Thu, Dec 20th 2012 8:41am — Tim Cushing

Every time the major players in the copyright industries kick off another push for more legislation, enforcement or protection, they make grandiose claims about how much IP-intensive industries contribute to the economy. "Millions of jobs generating billions in revenue, a small portion of it taxable!" they shout proudly in the direction of the nearest legislator or ICE agent. If IP protection was weakened in the slightest, the nation's entire economy would likely collapse.

IP is innovation, according to these industries. Weak IP laws lead to weak economies. This entertainment industry trope, filled with questionable numbers, is used to justify the endless push for draconian IP enforcement and stiff legal and civil penalties for infringement. But evidence to the contrary continues to mount, punching holes in the IP industries' favorite narrative.

Kevin Smith, Duke University's Scholarly Communications Officer, came across two recent articles which, when combined, seem to draw exactly the opposite conclusion: strong IP laws may very well be detrimental to economic growth. (via The Digital Reader)

Yesterday, Reuters news service ran an article about a rating of eleven countries based on their enforcement of intellectual property rights. The index was prepared at the behest of the U.S. Chamber of Commerce by a group called The Global Intellectual Property Center, and it ranks the U.S. at the top of the list in terms of strong IP protection (23.73 points on a scale from 0 – 25). But what is interesting is who scored lowest (out of the eleven countries that were ranked). The four “worst” countries for providing the strong IP protection important to the Chamber of Commerce were the four countries known as BRIC — Brazil, India, Russia and China.

So what else do we know about these four nations? In fact, why were they originally grouped together under the acronym BRIC? The answer is that the term was coined because these four countries were the fastest growing emerging economies, showing growth rates between 5 and 9 percent in their gross domestic products (compared with US growth averaging 3.2 over the past 65 years). The source of these averages for the BRIC nations is this report from PriceWaterhouseCoopers, dated February 2012, which contains this conclusion: “We expect the BRIC economies to continue to drive world economic growth in 2012.”

So the four countries driving economic growth are also the four countries with the weakest IP protection regimes, amongst those 11 rated by the Chamber of Commerce report. Doesn’t the conclusion seem simple, that weaker IP enforcement is part of the picture for economic growth?

Now, Smith points out that this connection is nothing more than correlation, but a few conclusions can be drawn. A lack of solid IP protection does not necessarily doom economies to subpar performance and increasing IP protection does not necessarily lead to a robust economic future. IP industries have relied on the credulity of legislators to pass off the "stronger IP enforcement results in more innovation, jobs, etc." argument, usually packaged with the "no copyright protection means no incentive to create" lie that conveniently ignores years and years of creation pre-copyright and thousands of new artists surfacing at a time when piracy is "rampant."

There's tons of evidence that contradicts the rationale driving the "need" for more IP enforcement. Smith goes on to list a few examples of artists thriving with little or no protection, including "Nollywood," Nigeria's film industry, which has exploded over the last 20 years despite truly rampant infringement, and K-pop star Psy, who's looking at $8 million earned without having to rely on the protections of copyright. So, as has been suggested here time and time again, the real "enemy" of innovation and creativity ISN'T piracy, it's the industries themselves.

[I]P protection is, at least a double edged sword. Piracy can reduce revenues, but it also helps to create distribution channels and grow markets. So creative industries seeking to grow in the digital economy need to do more than try, futilely, to eradicate piracy, they need to seek ways to shape their markets and their marketing to exploit the audiences that it can create.

"New business model," anyone? This has been pointed out again and again. Attempting to defeat something that it at least partially beneficial is, at the very least, short-sighted. On a larger scale, battling piracy with enforcement and legislation rather than by increasing options and providing better services is more than short-sighted -- it's dangerously self-destructive. There's very little evidence that enforcement efforts are making any real dent in file sharing -- certainly nothing that would justify the time, money and effort expended.

Smith concludes his post with these thoughts:

So, slippery as such conclusions can be, I feel comfortable with these two assertions. First, creative people and creative industries can thrive without strong IP protections. In fact, if you are continually looking to the government to increase IP enforcement on your behalf, your industry is probably already in bad trouble. Second, it is perfectly possible to over-enforce IP rights to the point where creativity and economic growth are stifled. There is good evidence that the US has passed that point, and the example of the BRIC nations should suggest to us that we need to reverse our course.

At this point, the legacy industries are too firmly entrenched to expect any sort of nimble maneuvering or backtracking on existing IP laws. A suggestion for just such a reversal, briefly posted by the Republican Study Committee, met a swift, ignoble death at the hands of Hollywood's lobbyists, who also pressured its author, Derek Khanna, out of a job. No matter how much evidence contrary to the copyright industries' talking points is presented, the response is always the same: more enforcement, legislation and protection. It will take a severely weakened entertainment industry to give any quarter, but as long as its aims remain self-destructive, that day seems inevitable.

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Filed Under: brazil, china, correlation, economics, growth, india, intellectual property, russia

35 Comments

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Anonymous Coward, 20 Dec 2012 @ 8:56am

Piracy
This growth can be explained in one word :-
PIRACY

/s
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Anonymous Coward, 20 Dec 2012 @ 8:58am

regardless of the evidence that supports how badly strong IP laws affect the economy etc of a country, while there are no laws that ban lobbying, no laws that penalise false IP take downs and assertions and no way of criminalizing the bribing of politicians and courts, all the while ramping up existing laws and introducing new ones, relying on the government to keep old business models and lying through the back teeth about jobs created and artists being paid, there will be no change, ever! until politicians grow some balls and do what needs to be done, unlike, as in the case of the recent sacking of Derek Khanna for speaking the truth about copyright reforms needed, there will be no start to change. the fear every government member, every politician has of the US entertainment industry, regardless of which country those governments and politicians are in, is unbelievable! the power those same industries have over law enforcement agencies and what they get those agencies to do is equally unbelievable. yet, regardless of who gets dropped in the shit for doing whatever they are asked or ordered to do, not one of those execs from the industries have the guts to stand up and say 'i did it'!! typical acts of all bullies!!
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Anonymous Coward, 20 Dec 2012 @ 9:02am

Most of those countries also have little or no innovations/inventions.

They're succeeding because of a combination of underpaid labor and use of other countries IP.
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Ninja (profile), 20 Dec 2012 @ 9:11am

Re:
Oh please, shut up. Go research about this before saying nonsense. I can tell you are squarely and completely wrong concerning Brazil. We have pioneer technology on ethanol sugarcane harvesting and processing; we got advanced deep water petrol extraction technology; I've heard at least 5 times in the last 5 weeks on mainstream news here about treatment being researched successfully for a few diseases; I've also heard about new diagnosis methods that give instant results for a large group of diseases thus facilitating public health management... I can go on. And I'll be telling you from memory I'm sure if I dig I'll find many more examples.

So yeah. Shut up.
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out_of_the_blue, 20 Dec 2012 @ 9:12am

China consumes more than HALF the world's cement.
Having grown beyond all previous records, YET we were told in the 70's and 80's that communist countries would collapse, unable to even feed their people! -- Now, I'm NOT advocating communism, nor even socialism (just want Populist limits on how much control The Rich have over countries, a position directly due to observed crimes), but obviously "conservative" and "capitalist" theories put out by economists of the time were and still are total crap: directed economies can indeed excel at industrial production, regardless of political tyranny.

SO, in short, there's no useful correlation between IP protections and growth, no more than is between industrial production and political freedoms. That's a main reason why I say economics is hooey, lies by The RIch and for The Rich, justifying various forms of plutocratic tyranny. The lies are eagerly advanced by the privileged kids of whatever society who are schooled in what the ruling class wishes, and whose own high position in corrupt societies naturally convinces them it's right that others should labor like animals.
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Anonymous Coward, 20 Dec 2012 @ 9:15am

Re: Re:
I said most, asshole.

And Brazil's energy boom is why their economy has grown so much; all of which involves IP.

Now shut up yourself and go do something about your country's insane murder rate.
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Ninja (profile), 20 Dec 2012 @ 9:18am

Re: China consumes more than HALF the world's cement.
Wait, do I find myself agreeing with you right now? Did I read it right?

I think I'll give you my insightful vote.

That's it folks, the world ends tomorrow.
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Richard (profile), 20 Dec 2012 @ 9:20am

Re:
They're succeeding because of a combination of underpaid labor and use of other countries IP.

Sounds familiar that - I seem to remember a country in the 19th century that stole all it's innovations from Europe and employed the cheapest form of labour possible (slaves). Now where would that be??
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Jay (profile), 20 Dec 2012 @ 9:22am

Re: Re: Re:
... Wait... Oil production equals ip protection?

Wat?
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Anonymous Coward, 20 Dec 2012 @ 9:29am

Ecoonomy needs a black market
I've theorized for some time that a certain amount of a black market is good for an economy. The key is that it doesn't get too big. You don't want it to dominate the economy, but be just large enough to keep some pressure on the main "legitimate" economy, keep the big players from getting too complacent. I'm thinking 15% might be the sweet spot.
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Ninja (profile), 20 Dec 2012 @ 9:30am

Re: Re: Re:
Again you show your ignorance. Even if you are right (and we have a bad bottleneck at the electric distribution system FYI) the fact that we use technology that involves IP somewhere in the economy it does not mean that we do not produce innovation.

Oh and we have 4 countries here: Russia, China, India and Brazil. I've seen partnerships with Chinese and Indian (I have had personal contact with some awesome researchers from India) so that leaves Russia out of my experience. If we consider Russia produces nothing it's only 25% so it's not "most".

As for the murder rate, it's a mixture of outdated criminal legislation along with poor public security practices and underpaid policemen. I can't see where Intellectual Property has any interface here.
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Ninja (profile), 20 Dec 2012 @ 9:33am

Re: Re:
It's long been buried under draconian and strangling IP protection laws. The irony.
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pixelpusher220 (profile), 20 Dec 2012 @ 9:39am

Re:
I would argue that TOO STRONG IP laws are bad, just as None or too weak laws are bad.

If you want to argue the premise for copyright providing incentive to artists to better the public good is wrong on its face, that's one thing and I don't know that most even here would agree with that.

However, wildly overreaching broad IP laws clearly are a hindrance to innovation and creativity. But 'some' IP laws are necessary. The physical world demands them, the digital world not nearly as much due to the infinite nature of its 'resources'.
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pixelpusher220 (profile), 20 Dec 2012 @ 9:42am

Re: China consumes more than HALF the world's cement.
China is a communist country that realized capitalist markets are better and so they control them, but let them provide the benefits.

They aren't growing like gangbusters because of 5 yr planning. They're growing because they're allowing the markets to work.

That and it's easy to build a 3 Gorges Dam when the gov't just says 'do it'. Big things can be done by all manner of governments. With top down direction, if not control, though you run a much higher risk of marching off in the wrong direction.
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MrWilson, 20 Dec 2012 @ 9:56am

Re:
"They're succeeding because of a combination of underpaid labor and use of other countries IP."

You mean like the United States did during the Industrial Revolution in the 19th Century? We copied England's IP, often sneaking their inventions out of the country.

Now we're on top and it's incumbent upon us to help our wealthiest IP holders by exporting harsh IP laws to the rest of the world so that nobody does to us what we did to others...
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John Fenderson (profile), 20 Dec 2012 @ 9:57am

Re:
There's actually quite a lot of innovation and invention coming out of China, India, and even Brazil. I don't know about Russia.
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John Fenderson (profile), 20 Dec 2012 @ 10:01am

Re: Re:
Well said. This pretty much summarizes my own opinion. Thoughtful copyright, trademark, and patent laws can be hugely beneficial to everybody. The ones we have right now, however, are not thoughtful or good at all, and are worse than having no such laws at all.

I don't want to see these laws abolished, but rather done right. That said, having no such laws at all is better than the laws we have right now.
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Capitalist Lion Tamer (profile), 20 Dec 2012 @ 10:08am

Re: Re: Re:
I said most, asshole.

Now shut up yourself and go do something about your country's insane murder rate.

Even if the sentence between these two was true, AC has effectively removed himself from the conversation with these two sentences.

Drop a baseless assertion. When challenged, hurl insults. If you consult a dictionary or thesaurus, you might notice that "insult" and "citation" have two very different definitions.
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Jeffrey Nonken (profile), 20 Dec 2012 @ 10:11am

It's like treating a paper cut by removing the limb. Sure, the paper cut isn't a problem any more...
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TheResidentSkeptic (profile), 20 Dec 2012 @ 10:24am

It is just sad...
.. that "inevitable" doesn't mean "imminent".

Shakespeare was right.
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Anonymous Coward, 20 Dec 2012 @ 10:25am

My first thought is that an emerging nation would want weak IP laws, since they would have no existing base of IP for those laws to protect. Whereas a country like the US which has a lot of old IP would want to get as much as possible out of the existing IP.

I'm not sure that the IP laws have much to do with the growth - and even if they did, what's good for an emerging nation might not always be best for a developed one. The "Micky Mouse retroactive copyright extension" where nothing new gets into the public domain might actually make some sense for us from an international economic standpoint, even if it's horrible from a fairness standpoint and perhaps unconstitutional.
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Jay (profile), 20 Dec 2012 @ 10:27am

Re: Ecoonomy needs a black market
Interesting premise... Any data to back it up?

I actually recall discussions about the underground black market, but I have no idea why a "sweet spot" of 15% would work. I always took it to mean something is off in the regulation or the business so people move elsewhere.
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Anonymous Coward, 20 Dec 2012 @ 10:36am

Re: Re: Re:
I am moving towards abolition of copyright and patent, and restricted trademark, because if any form of copyright and patent, (other than attribution), are kept, the corporations will just keep ratcheting up their scope.
The people now pushing for the maximalist approach do not understand the creative processes, or if they do see commercial advantage to strong laws, and no advantage to fostering scientific and cultural advances. The latter generally threaten their positions by threatening their companies.
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Chosen Reject (profile), 20 Dec 2012 @ 10:44am

Re: Re: Re: Re:
I agree with you except for the attribution issue. I worry about having to attribute every last little thing. See Nina Paley's post about it. She says it much better than I could.
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Anonymous Coward, 20 Dec 2012 @ 10:48am

Re:
The "Micky Mouse retroactive copyright extension" where nothing new gets into the public domain might actually make some sense for us from an international economic standpoint, even if it's horrible from a fairness standpoint and perhaps unconstitutional.

What long copyright is doing is locking up culture, and turning it into entertainment. That is creating a system where a few companies produce works of entertainment that are consumed by the general population. Real culture is something that people participate in by using to have their say, and entertain each other. Because this is now being carried out where the publishers can see it,they are trying to stamp out this use of culture, and therefore destroying culture.
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Not an Electronic Rodent (profile), 20 Dec 2012 @ 10:57am

Re: Re: Re:
It's long been buried under draconian and strangling IP protection laws. The irony.
Yeah, but on the up-side(!) they're now holding as many other nations as they can at gunpoint to try and drag them down to the same staid level. If they succeed it'll then be the most innovative nation again without having to change anything!
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Anonymous Coward, 20 Dec 2012 @ 11:22am

Re: Re: Re: Re:
And innovation will slow to a snails pace, and entertainment will be overrun with reality show.
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Anonymous Coward, 20 Dec 2012 @ 11:36am

Re: Re: Re: Re: Re:
While the boundaries are fuzzy, the the creator, and significant contributors should be attributed. It should be optional for attribution to anybody working under the direction of a producer or director. I.e. an orchestral recording attributes the writer of the work, the conductor, the orchestra in general, and any soloists.
Obviously it is impossible to attribute every little quote from someone else's work, especially as the creator may not remember where they got the quote. The creator is however free to attribute anyone's work that they feel made a contribution to, or influenced, their work.
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John Fenderson (profile), 20 Dec 2012 @ 12:00pm

Re: Re: Re: Re:
if any form of copyright and patent, (other than attribution), are kept, the corporations will just keep ratcheting up their scope.

I understand where you're coming from, but don't find that argument persuasive. If there were no copyright at all, then big corporations will be just as bad, or even worse, than they are now. The problem with expansion of corporate power exists, and will continue to exist, in any legislative environment.

The only solution to that is a dynamic one: eternal vigilance and an eternal fight against such expansion and abuse.
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Anonymous Coward, 20 Dec 2012 @ 12:56pm

Re: Re: Re: Re: Re:
The problem with eternal vigilance is that it costs real time and effort from people who often have more pressing needs. Also note that civil law favours the rich, and has been a significant tool in de facto extension of copyright. This include the copyright owners making it cheaper for other businesses such as ISPs to go along with the enforcement plans.
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Anonymous Coward, 20 Dec 2012 @ 2:53pm

The Fastest Growing Emerging Economies Are Also Those....

with the weakest worker protection laws, the weakest environmental laws, the weakest financial oversight laws, the weakest anti-corruption laws, etc.
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Pseudonym, 20 Dec 2012 @ 3:44pm

Re:
This raises a very important point.

Not the first sentence; that is a vague statement which relies on how you define "innovation" or "invention". Some of the poorest countries are extremely innovative or inventive, but the problems they're trying to solve are different from those in the first world.

The first half of the second sentence is the one part that I agree with, and it's very important to understand.

European economies grew very fast during the industrial revolution, but the wages and conditions of workers were horrible by today's standards.

Correlation is not causation.
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Not an Electronic Rodent (profile), 21 Dec 2012 @ 5:56am

Re: Re: Re: Re: Re:
You're waaaay too late with the 2nd bit...
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Mason Wheeler (profile), 21 Dec 2012 @ 9:38am

Re: Piracy
Actually, I think it can be explained in two words: EMERGING ECONOMIES. I don't remember who said this, but it's one of the best quotes I've ever heard on the subject of economics: "Only idiots and economists believe that growth can continue indefinitely."

Put another way, I have a cousin who's just entering her teens. She's growing a lot faster than I am. Why? Because she's just entering her teens, and I'm a mature adult.
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ericjongkind (profile), 4 Jan 2013 @ 5:08pm

Re: China consumes more than HALF the world's cement.
I am no banking advocate banks are parasites of society and enemy of the people but the only reason for the good things happening in china has nothing to do with directed economy or communism and all to do with private ownership, free enterprise and free trade. In communist China one could not own land. After the land reforms in 1950 millions died of hunger. Same thing happenend in the Soviet union 30 years before. The disowned peasents when talking back were labeled culags and send to siberia to labour like animals. Absolutely nothing good has ever come from bringing into practice the dismal ideas of Karl Marx.
This is the truth if not then I am a victim of the lies of the tyrannic ruling class.
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