National Innovation Systems Presented by Team 4: Xindi Li Herlinna Chung Lina Liu Alix Linaker Katrina Cheney

Agenda Backgroud and Brief Summary Reflection Industry Application Conclusion References Q & A

Background and Brief Summary “International Patenting and Less Developed Countries” (1973) by Edith Penrose Background Globalization and advanced technology Developing countries and Union for the Protection of Industrial Property

Background and Brief Summary Summary Costs and benefits of granting foreign patents in less-developed countries Benefit: technological transfer & foreign investment Cost: monopolistic and restrictive effects

Background and Brief Summary Leveraging Knowledge Across Geograic Boundaries ” (2007) by Stephen Tallman & Anupama Phene Background Information era Knowledge as valuable resource Continuous innovation

Background and Brief Summary Brief Summary Knowledge transfer within clusters, between clusters, and between countries International knowledge transfer depend more on the originating firm innovativeness than recognized value and prior firm knowledge flows

Reflection on Penrose’s Article 1st argument Patents were a valuable aid to less- developed countries' development and assisted the spread of technology 2nd argument Granting foreign patents can restrict the transfer of technology as the competition among other sellers of technology is reduced

Reflection on Penrose’s Article The article against 1st argument and supporting the 2nd argument “Foreign Patent Monopolies in Developing Countries: An Empirical Analysis” (1976) by Helge E. Grundmann Helge states that the main reason why foreign patent should be granted is that the company aims to be protect its imports from imitators'. Also, the article rebutted the popular belief that patents will be beneficial to the development through transfer of technology to developing countries

Reflection on Penrose’s Article 2nd argument further supported by "Patents Revisited: Their Function in Developing Countries" (1972) by Vaitsos Patents seem to act as an obstacle to the transfer of technology to developing countries, and that patents restrict local technological development through imitation and adaptation.

Reflection on Tallman and Phene’s Article Argument: Domestic firms have an advantage in acquiring knowledge spillovers within the country Supported by the articles: “The Role of Culture on Knowledge Transfer: the Case of the Multinational Corporation.” (2006) by Lucas Leyland "International Transfer of Knowledge: The Role of International Trade and Geographic Proximity” (2002) by Fredrick Sjoholm

Reflection on Tallman and Phene’s Article Finding and conclusion from the articles: Geography may create boundaries, but it is the underlying economic and institutional structure and microeconomic linkages that are significant in generating innovative activity and knowledge spillovers

Reflection on Tallman and Phene’s Article Leyland suggests: The location of the countries will significantly impact the possibility of knowledge transfer between them. Sjoholm suggests: Regardless of geographic proximity, both knowledge and technology transferred from developed countries to less-developed countries will assist economic development in one way or another

Knowledge Transfer Benefits Possible benefits of knowledge transfer to less-developed countries Change in productivity Create new profits Build relationships Reduce risks Save time and costs

Barriers to Knowledge Transfer Generational differences Lack of incentives Lack of information and communication technologies Government regulations

Industry Application “Protection of U.S. Patent Rights in Developing Countries: U.S. Efforts to Enforce Pharmaceutical Patents in Thailand” (1994) by Stefan Kirchanski

Industry Application Helge: Patentees do not intend to come into licensing agreements in developing countries because of their inferior industrial development U.S. drug industry will not increase investment in local R&D and production facilities in Thailand

Industry Application Tallman and Phene: Underlying economic and institutional structure are important to generating innovative activity Thailand's economic and political conditions lead to prevalent pirating activities

Conclusion 1.Foreign patenting can not help to stimulate developing country’s economic development nor assist technology transfer. Geographic proximity affects knowledge transfer. Patenting systems act as an interesting and useful dimension to compare different countries.

References Helge E. G. (1976). Foreign Patent Monopolies in Developing Countries: An Empirical Analysis. The Journal of Development Studies, 12(2), Kirchanski, S. (1994). Protection of U.S. Patent Rights in Developing Countries: U.S. Efforts to Enforce Pharmaceutical Patents in Thailand. Loyola of Los Angeles International and Comparative Law Review. 16(2), Retrieved from Leyland, L. (2006). The Role of Culture on Knowledge Transfer: the Case of the Multinational Corporation. The Learning Organization, 13(3), Penrose, E. (1973). International Patenting and Less Developed countries Sjöholm, F. (2002). International Transfer of Knowledge: The Role of International Trade and Geographic Proximity. Weltwirtschaftliches Archiv, Tallman, S., Phene, A. (2007). Leveraging Knowledge Across Geographic Boundaries. Organizational Science, 18(2), Vaitsos, C. (1972). Patents Revisited: Their Function in Developing Countries. The Journal of Development Studies, 9(1), 71-97

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