Wednesday, October 31, 2012

Indonesia's economic boom and IP

Indonesia is booming, it is the 'I' in the CIVETS, the countries behind the BRIC nations (although arguably bigger than Brazil really). Having avoided the GFC, this G20 country has consistent growth rates of 6% and FDI at record levels (nearly USD 30 bn is projected for 2012).

What does this mean for IP? Its a mixed picture. Much of Indonesia's investment goes into resources, but well over of its USD 850 Bn GDP is domestic demand. That means increasing interest from businesses. Indonesia has the largest pharma market in SE Asia. Manufacturing is growing to feed local demand and as more manufacturers see it as an alternative to China. Consumer goods companies see a booming middle class.

berdasarkan negara pemohonIP Komodo reported here on how weak local R&D is and how few patents result. But patents filings are up year on year, says the IPO - see chart right. That can only mean one thing, that more foreign technology companies are filing in Indonesia as it represents a manufacturing base or a market for their goods.

IP Komodo reported here on how there are fewer foreign trademarks registered in Indonesia than Thailand. Yet Indonesia's economy is much larger than Thailand, even even excluding resources. Local companies do register a lot of brands - around 50,000 per year; whereas foreigners number only in the several thousands. Could it be that foreign trademark owners haven't entered the market in great numbers yet? That makes sense if you consider this the 4th largest country on earth, is not even in the top 20 US trading partners, far below Thailand, Malaysia and Singapore.  So US and EU FDI could grow significantly.
Provided economic stability remains (the 2014 general election doesn't seem a threat), growth will continue and more and more companies will invest in Indonesia, boosting IP filings. Now if only the enforcement system worked effectively...!

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