Why Intellectual Property Is a Vital Trade for the English-Speaking World ; BUSINESS

By Hamish Mcrae Business & Financial Journalist of the Year | The Independent (London, England), October 12, 2006 | Go to article overview
Save to active project

Why Intellectual Property Is a Vital Trade for the English-Speaking World ; BUSINESS


Hamish Mcrae Business & Financial Journalist of the Year, The Independent (London, England)


One of the things that the YouTube purchase by Google has highlighted is the ambivalence the world has over protection of intellectual property. You-Tube's content is free to it and the end user, while Google's main product, its search engine, is free too.

But while some of the stuff on YouTube is amateur home video, others include clips of adverts, pop videos, bits of film and so on, where someone has been paid to create the content. In the case of Google a much higher proportion of the references there contains intellectual property that was expensively generated and which you can also get mostly for free.

There is a narrow issue here: to what extent should the copyright laws apply to new media and new delivery mechanisms in an increasingly global world economy? That is really just a current version of an old problem. Pirating of other people's ideas has been a problem for centuries. I have just been reading Edward Gibbon's autobiography in which he complains of a pirated edition of one of his early works in Dublin. In the middle of the 18th century, as now, Ireland was under separate jurisdiction from England. As far as Google's impact is concerned, there are two views. One is that it undermines a couple of centuries' copyright tradition, the other that it enables the creators of intellectual capital to promote their ideas to a global audience. YouTube, now it has been taken over and broadens its content, seems likely to run into similar issues.

But the narrow legal issue seems to me much less interesting than the broader one: how in practical terms should creators of intellectual property maximise the return on their investment? You could almost say: how do you make money in a world where all your ideas are liable to be stolen?

Some answers in a moment; first some facts.

International trade in intellectual property is rising at an astounding rate. It is tremendously difficult to measure because much intellectual property is embedded in products. If you buy a BMW, you are buying a product but you are also buying the generation or more of knowledge that has gone into designing the car and the clever production method that BMW has developed. But you see one estimate of the growth in the first graph: it is approaching a $100bn ([pound]54bn) business.

It is a business that matters a lot for Britain. The second graph shows the balance of trade in intellectual property as defined by the International Monetary Fund for selected countries. This may seem a slightly nerdy thing to do but I find it fascinating to see which countries gain from trade in "cleverness" (mostly patents and royalties) and which lose. So I went to the IMF's balance of payments statistics (we don't yet have the 2005 ones, so these are the ones for 2004) and have added up the receipts and payments to produce the balances shown.

Unsurprisingly the US dominates such trade but the UK is a clear second. Sweden does well, largely because of its strong exports of popular music - yes, royalties of course include those of the entertainment industry - while Ireland does badly, not because of any intellectual shortfall of its people but because of its tax system. Thanks to very low corporate tax rates, now at 12.5 per cent, Ireland has become the main European centre for US computer manufacturers. As a result it imports a lot of software to put on to the computers it then exports: the net imports of intellectual property are a function of the net exports of manufactured products.

The key point here seems to me to be that trade in intellectual property is particularly important for the English-speaking world.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Why Intellectual Property Is a Vital Trade for the English-Speaking World ; BUSINESS
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?