The World Economic Forum recently published its 2009 Global Competitiveness Report, and I was struck by one particular statistic, as well as the conclusion drawn from it by the US Chamber of Commerce. One of the many statistical tables in the WEF report ranks the perceived strength of national protection for intellectual property. The United States ranks 19th on this chart, out of 133 countries rated. As this blog post from IP Watch reports, that ranking prompted The US Chamber of Commerce to call for stronger protection measures in the US.
As someone who believes that IP protection in the US is certainly strong enough and is often over-enforced, I was struck by several flaws in the reasoning of the Chamber of Commerce or, at least, differences about what I think the report could mean.
First, the Chamber of Commerce thinks that 19 out of 133 is a low ranking, a judgment that seems questionable at best.
Second, it is important to note that this chart reports “executive perceptions” about the strength of IP protection in a country. While that may make sense for a report about international competitiveness, it is too subjective a measure to cause Congress to hasten to strengthen our copyright laws.
Finally, I wonder how strength of IP protection actually correlates to economic growth. There is a pretty good correlation between perceived strength of protection and competitiveness in the WEF report, but of course, those books are cooked, since the results of the survey are part of the data on which conclusions are based. I decided to try an experiment, which even as a non-economist I recognize to be crude, albeit interesting. I started with this list of countries based on economic growth (the growth rate of the Gross Domestic Product) using data from the CIA World Fact Book. The US is 67th in GDP growth rate, and I made a list of ten countries from the G-20 group of nations with higher growth rates than that of the US and compared that list of ten countries to the rankings of perceived strength of IP protection. All ten of these countries, it turns out, are perceived to have weaker IP protection than the US. To choose an obvious example, China has the fastest economic growth rate of any of the G-20 economies, but is ranked far below the US — at 61st — on the list of strong IP protectors.
It is easy to lie with statistics, of course, but this simple comparison suggests that weaker IP protections might actually correlate with economic growth, or that in any case there is a median position where IP protection is correctly calibrated to encourage economic growth, and the US has passed that point. This search for the correct level of protection, I think, is something the World Intellectual Property Organization is struggling with as it considers its “development agenda” recommendations. At the very least, nations need to preserve flexibility in their IP laws and recognize that the what is best for Big Content is not necessarily good for a nation.