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Sunday, December 9, 2012

Vietnam IP worries

Vietnam is lags its ASEAN neighbours in IP protection and innovation. The European Chamber of Commerce in Vietnam has criticized weak levels of IP protection as a reason to prevent investors bringing technology to Vietnam. That leaves only low labour costs, to attract foreigners. It also contradicts the government's intention to create hi tech industries, they say.

This is the classic argument - weak IP protection (or enforcement, depending on the nation) = foreign investors will stay away.  Unfortunately it is not that simple. Other factors often outweigh weak IP protection, leaving IP holders in the tricky situation that their businesspeople want to invest, but IP problems will ensue.  In Vietnam, IP enforcement is over-complicated, time consuming and so expensive. But the country is developing fast with improving infrastructure and a low cost, but well educated workforce. Perhaps then a better way to view this is to accept the weak IP protection levels, but since investors will come anyway, then the real answer is that the cost of investment will be higher as IP related costs are higher. 
 
Looking at IPR from the other, domestic side, an interesting report from the Ministry of Science and Technology (MOST), shows some interesting innovation gap metrics about Vietnam.  The country has 24,300 PhDs and 101,000 masters; the most professors and PhDs in South East Asia. No surprises there since perhaps the best communist era legacy was a focus on education. But academia stops there. No Vietnamese university has been listed in the world’s top 500 universities. The number of scientific publications each year is about the same as a single Thai university. That results in a serious lack of innovation - from 2006-2010, Vietnam only had 200 patents and utility models granted to local companies, and only 5 US patents. This is far below other ASEAN countries.

As reported here on Indonesia, until local IP ownership increases, the demands for improved IP protection come only from foreign enterprises. And if weak local R&D prevents the growth of local IP countries like Indonesia and Vietnam remain trapped in the innovation gap. The simply won't get the competitive edge that the knowledge economy brings to a country and its businesses.  

 

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