Food, Health and the Knowledge Economy

The State and Intellectual Property in India and Brazil

Valbona Muzaka

• Publisher: Palgrave Macmillan
• Year: 2017
• Print ISBN:
  9781137593054
• eBook ISBN:
  9781137593061
• Topic: Política y relaciones internacionales
• Subtopic: Gestión de la información

This book opens a window into how two ambitious countries – India and Brazil – are seeking to become knowledge powers in the 21st century. As the knowledge economy became the preferred way of conceptualising the economy and its future direction, in the more economically-advanced countries, our search for understanding also followed the same direction. This generated a body of work that has neglected countries that, like India and Brazil, are attempting to make the leap into knowledge economies. Muzaka explores these motivations and the ways in which they have inspired a number of institutional reforms in India and Brazil. The author offers an investigation of the role the state in shaping the respective intellectual property systems pertaining to the pharmaceutical and agro-biotechnology sectors and the multiple social conflicts that have unfolded as a result.

© The Author(s) 2018

Valbona MuzakaFood, Health and the Knowledge EconomyBuilding a Sustainable Political Economy: SPERI Research & Policyhttps://doi.org/10.1057/978-1-137-59306-1_1

Begin Abstract

1. Introduction

Valbona Muzaka¹

(1)

Department of European & International Studies, King’s College London, London, UK

Keywords

Intellectual propertyKnowledge powersIndiaBrazil

End Abstract

Ongoing methodological disputes notwithstanding, there is little doubt that intellectual property (IP) markets have grown substantially since the 1980s. By some accounts, total receipts for the use of IP worldwide were estimated to have reached US$ 318 billion in 2015, up from US$10 billion in 1980 and just under US$3 million in 1962 (current US$). ¹ Despite the increasing internationalisation of research and development (R&D) activities, around 88% of income from IP titles such as patents, copyrights and trademarks (though not tax extracted on such income ² ) continues to flow to the US, the EU and Japan . Of the many factors contributing to this heavily skewed distribution of IP rents , the concentration of high-tech sectors in the hands of a few market actors headquartered in the wealthy regions of the world economy is crucial. For instance, around 44% of the global pharmaceutical market , 50% of the global seed market and over 80% of the pesticide one are controlled by the top ten companies in each respective sector (Kesič 2011: 218; Brand et al. 2008: 19), almost all of which are headquartered in frontier economies and use IP titles intensively as a market control and monetarisation tool. Their advantageous market position is based to a significant extent on the structural advantages of frontier economies, the most notable of which is perhaps the relatively strong R&D base developed over time with substantial contributions from public sources: from the end of World War II (WWII) until the 1980s, the state funded more than 50% of all R&D in the OECD (Organisation for Economic Co-operation and Development) members (Niosi and Faucher 1991: 133). A whole raft of other measures undertaken and underwritten by states have further enhanced the capabilities of these business actors to control markets and enhance incomes appropriated from them. One important way in which frontier states have attempted to strengthen the position of their high-tech sectors in global knowledge markets has been that of expanding the remit and the temporal and spatial reach of IP titles. The transformation of collective social knowledge into private knowledge via the institutional form of IP—a precondition for the existence of knowledge and IP markets and income appropriated through them—would not have been possible were it not for the state acting as the guarantor, enforcer and legitimator of IP titles. In other words, the state plays a central role in creating and sustaining IP markets. Moreover, the state is not only a market maker but also a market player. State agencies in frontier economies , for instance, are important players in IP markets themselves, for example, as owners of IP titles or, to offer a recent example, of the so-called sovereign patent funds that act as state-backed investment vehicles to encourage the expansion and deepening of patent markets.

The notable expansion of IP marke ts alongside the even more remarkable expansion of financial markets is a manifestation of deeper tendencies that have come to characterise the more advanced regions of the global economy from the late 1970s onwards. Perhaps the more notable of these has been a shift in the locus of wealth creation away from productive activities towards wealth created through the manipulation and exploitation of knowledge and information, as well as through rents on assets such as financial and IP titles. ‘Financialisation ’ and ‘the knowledge economy’ are two frequently used, if often vague, terms that capture these tendencies. Usually studied separately, these two tendencies are in fact closely intertwined. But contrary to the generally more critical treatment of financialisation and its consequences, the knowledge economy has many vocal supporters, of which the most notable are states themselves. Often invoking the difficult hand dealt by financial markets to justify an unpopular move, state representatives are just as often found praising the advantages of the knowledge economy. Since this particular way of conceptualising and organising socio-economic activities became dominant in frontier economies in the early 1990s, states everywhere displayed no immunity to its charms: it is almost impossible to find official policy announcements that do not make reference in one way or another to the necessity and advantages of becoming a knowledge economy or participating in the global knowledge economy today. As it (and more recent mutations such as bioeconomy , gig economy, digital economy or network economy) became the preferred way of conceptualising the economy and its future direction in the more economically advanced countries, our search for understanding its nature and exigencies also followed the same trajectory, generating a body of work that is largely focused on frontier countries, while neglecting others who, by choice or necessity, are attempting to make the leap into the global knowledge economy.

The most notable ‘others’ in this context are China , India and Brazil. As domestic and international pressures led the state in all three countries to contemplate a new growth strategy by the late 1970s and early 1980s, the decisions taken, although distinctive, were unmistakably orientated towards transforming these economies into competitive knowledge-based economies. In China, for instance, Deng Xiaoping’s Four Modernisations strategy—modernisation of agriculture , industry, science and technology, and defence—was predicated to a significant extent on science providing the route to ‘socialism with Chinese characteristics’ (Keeley 2005). The aim of the ensuing 863 National High-Tech Programme established in 1986 was to enable China to co-opt the new sciences (e.g. information technology , new materials and biotechnology ) before they came to be dominated by the West and the US in particular (Jakobson 2007). Enabling China to operate close to the technological frontier was seen as a matter of not merely economic survival in the changed circumstances, but also of national pride: China finally regaining its rightful place in the world following centuries of humiliation and semi-colonial rule (Hsü 2000). As increasing funds were channelled towards financing R&D—reaching the EU level of around 2% of gross domestic product (GDP) in 2015 ³ —the state’s vision of transforming China into a knowledge economy included the ambitious goal of reaching the status of ‘innovation-orientated’ country by 2020 and a world leading science power by 2050 (Jakobson 2007). Following a different route, the Indian state, equally intent on re-establishing India as a world power, made clear that it was working towards transforming India into an innovative economy and one of the top five global knowledge powers by 2020 (GoI 2013). Like China and India, Brazil has made no secret of its ambitions to move from ‘emerging power’ to ‘knowledge power’ status. Compelled on the one hand by changes in the global economy and on the other by its own version of exceptionalism , it, too, has been attempting the transformation of its socio-economic structures with a view to becoming the great technological and environmental power of the twenty-first century (Lula 2007).

Evaluations based on indicators such as gross R&D expenditure as a percentage of GDP or the average rate of annual growth in R&D spending would decidedly put China ahead of India and Brazil. But focusing on India and Brazil, as is the intent here, is arguably more rewarding for a number of reasons. First, since the late 1940s, the state in both India and Brazil has shown a consistent commitment towards supporting R&D and investing in the nation’s science and technology base as a key element of its chosen growth strategy , a consistency that the Chinese state cannot claim. Second, China turned its attention seriously to IP issues domestically during the 1990s and only found its voice in international IP fora when the first decade of the twenty-first century was coming to a close (Yu 2013). By contrast, India and Brazil both inherited IP statutes dating back to the 1800s and, more importantly, this experience with domestic IP rules was accompanied since early on with activism in international fora. As will be seen in Chap. 4, the Indian and the Brazilian states have a long record of involvement with IP issues internationally, more than any other ambitious contenders, starting from the 1950s and continuing to this day. The fourth chapter provides an account of these IP contests, focusing in particular on the most significant conflicts related to (pharmaceutical) patents and plant genetic resources up until the early 1990s, when the consolidation of the knowledge economy imaginary in advanced economies was accompanied—not by chance—by the arrival of a global and much stricter IP regime that was ushered in by the 1995 WTO TRIPS Agreement. ⁴ It is on account of this activism that India and Brazil have earned the label of ‘leaders of the developing world’ on IP issues, a label China is yet to attain. Third, China’s success is often presented—although not very convincingly—as an example of a state that understands the exigencies of the knowledge economy and responds to them effectively and robustly, untroubled and unhindered by social conflicts. This picture, simplistic as it is, contrasts strongly with the ‘slower’ progress made by the Indian and Brazilian states on account of myriad economic and political impediments and all manner of conflict. These impediments and conflicts are precisely why understanding the role the state in both has played in shaping IP rules, and the tensions that have unfolded as a result, may prove a more interesting and rewarding exercise.

It will be said that these reasons appear justifiable only insofar as a focus on the state and its role in shaping the IP institutional form is justified. Why explore the many exigencies the knowledge economy places upon a society through the prism of the institutional form of IP? As will be discussed at more length in the second chapter, what sets the knowledge economy apart from other socio-economic formations is not that the latter were not knowledge based, but that now knowledge functions more like a fictitious commodity and fictitious asset than in these other formations. The primary institutional form that mediates the functioning and circulation of knowledge as a commodity and asset is that of IP. Commonly referred to as intellectual property rights—a term avoided here as the language of rights naturalises the many problematic aspects of this institution—IP is an umbrella term that includes within its remit a disparate and ever-expanding set of titles of which the most familiar remain patents, trademarks and copyrights. From its rudimentary beginnings in the fifteenth-century Europe, the IP institution has taken different forms across time and space, but it could be said that, especially from the 1980s onwards, it has more or less eliminated alternative ways of organising knowledge production and circulation in favour of a scarcity- and market-based model that has increasingly come to cater to private-market actors’ short-term interests. None of this could have occurred without (the frontier) states creating, guaranteeing, enforcing and expanding IP titles in ever larger parts of the world and for longer time periods on behalf of these actors.

If this account strengthens the rationale for focusing on IP in the context of the knowledge economy , objections may still be raised about the proposed focus on the state. Why this focus given the many empirical and theoretical observations m...

Table of contents

• Cover
• Frontmatter
• 1. Introduction
• 2. Catching Up in the New Knowledge Economy
• 3. Financialisation and the Emergence of Biotechnology
• 4. Intellectual Property for Pharmaceuticals and Plant Genetic Resources in Historical Perspective
• 5. Intellectual Property for Pharmaceuticals and Agro-Biotech in India
• 6. Intellectual Property for Pharmaceuticals and Plant Genetic Resources in Brazil
• 7. Looking Ahead: The Emerging ‘Knowledge Powers’?
• Backmatter