INTERNATIONAL POLITICAL ECONOMY
Knowledge and Technology
Intellectual Property:
A Tool for Development
“In the age of the knowledge economy, the efficient
and creative use of knowledge is a key determinant of
international competitiveness, wealth creation and
improved social welfare.”
“An effective intellectual property (IP) system
embedded within a national strategy which anchors IP
considerations firmly within the policy-making process
will help a nation to promote and protect its
intellectual assets, thereby driving economic growth
and wealth creation.”
Kamil Idris
WIPO Director General
Influence and Decision Making
• Knowledge provides individuals with the
information and understanding they need to make
informed decisions.
• With knowledge, individuals can assess situations,
analyze options, and make choices that align with
their goals and interests. It gives them the power to
influence outcomes and shape their own lives.
Chapter 8:
Structure
Knowledge and Technology: The Basis of Wealth
and Power
• Knowledge is power, and is wealth too for those
who know how to use it.
• Influence and Decision Making
• Problem Solving: solve problems and overcome
challenges
• Personal Development
• Empowerment and Confidence
Problem Solving:
• Knowledge equips individuals with the tools and
skills to solve problems and overcome challenges.
• It enables them to think critically, evaluate different
perspectives, and come up with creative solutions.
The ability to solve problems is a valuable asset in
personal and professional contexts, allowing
individuals to navigate difficulties and achieve
success.
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 Personal Development:
• Knowledge broadens and deepens an individual's
understanding of the world. It opens doors to new
ideas, perspectives, and experiences, fostering
personal growth and development.
• With knowledge, individuals can expand their
horizons, develop new skills, and enhance their
capabilities, ultimately leading to self‐improvement
and success.
Knowledge and Technology: The Basis of Wealth
and Power
“In a manufacturing state there is not a path which
leads more rapidly to wealth and position than that
of invention and discovery” – Friedrich List
Innovation and Competitive Advantage
Intellectual Property Rights
Job Creation and Economic Growth
Export and Trade Opportunities
Technological Advancement and Infrastructure
Development
Knowledge and technology are increasingly dispersed
The pace of technological changes has quickened.
• The rapid pace of technological changes signifies the
continuous evolution and advancement of human
knowledge and capabilities. Technology has become an
integral part of various aspects of our lives, from
communication and transportation to healthcare and
entertainment.
• The accelerated pace of technological changes enables the
development of innovative products, processes, and
solutions that drive economic growth, improve efficiency,
and enhance the quality of life. Those who possess and
leverage the latest knowledge and technologies have a
competitive advantage in industries, markets, and societies.
Empowerment and Confidence:
• Knowledge empowers individuals by boosting their
confidence and self‐esteem. When people possess
knowledge in a particular area, they feel more
capable and competent. This confidence enables
them to take on challenges, pursue opportunities,
and overcome obstacles.
• Knowledge provides a sense of empowerment,
enabling individuals to assert themselves and make
a positive impact.
Three important trends have become apparent
over the last twenty years:
1. The pace of technological changes has quickened.
2. Knowledge and technology are increasingly
dispersed.
3. Information moving from desk to desk very easy,
or from country to country.
=>These three trends show that Knowledge is wealth
and it is power
• Knowledge and technology are no longer concentrated in a few
centralized entities or locations. In the past, knowledge and
technological expertise were primarily held within a limited
number of research institutions, corporations, or countries.
However, with advancements in communication, collaboration,
and global connectivity, knowledge and technology have
become more accessible and widespread.
• Today, individuals, organizations, and countries around the
world have greater access to knowledge and technology,
enabling them to participate in innovation and contribute to
economic and social progress. This dispersion of knowledge and
technology democratizes opportunities and empowers
individuals and communities to create wealth and wield power.
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Information moving from desk to desk or from country to The International knowledge structure
country very easy.

• The ease of information movement, facilitated by

advancements in communication technology and
• The International knowledge structure ‐ is the set of
globalization, has revolutionized how knowledge and ideas relationships that govern access to knowledge and
are shared. technology around the world, a web of rules, practices,
• Information can now be transmitted rapidly and effortlessly institutions, and bargains that determines who owns
across borders, organizations, and individuals. This has led to and can make use of knowledge and technology where,
unprecedented levels of collaboration, exchange of ideas,
and access to information. The free flow of information how and on what terms.
enables individuals and organizations to acquire knowledge,
stay updated with the latest developments, and leverage
information for decision‐making and problem‐solving.
• In this interconnected world, those who can effectively
access, interpret, and apply information have a significant
advantage in terms of wealth creation and power.

Technology and technological innovation

• Technology: refers to the application of scientific

knowledge, tools, methods, and materials to solve
problems, meet needs, and achieve specific
objectives. It encompasses a wide range of tangible
and intangible elements, including machinery,
equipment, processes, systems, software, and
techniques.
• Technology can be used to create, modify, or improve
products, services, or processes, leading to
advancements and efficiencies in various domains.
• Technological Innovation: Technological innovation refers to
the process of introducing or creating new or significantly
improved technologies, products, or processes.
• It involves the development and implementation of new ideas,
concepts, or methodologies to address existing challenges,
improve efficiency, or meet evolving needs.
• Technological innovation often results in the discovery,
invention, or adoption of new technologies that offer superior
performance, functionality, cost‐effectiveness, or other
competitive advantages.

Key characteristics of technological innovation

• Technological innovation plays a crucial role in driving

progress, economic growth, and societal development
by fostering creativity, competitiveness, and the ability Novelty
to adapt to changing circumstances. Improvement
• It is a key driver of advancements in various fields,
including science, engineering, healthcare,
Value Creation
communication, transportation, and many others. Implementation
Iterative Process

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Novelty:
• Technological innovation introduces new elements,
approaches, or solutions that differ from existing
technologies or practices. It involves a departure
from the status quo and often brings about
disruptive changes.
Value Creation:
• Technological innovation creates value for
individuals, organizations, or society as a whole. It
can generate economic benefits, improve quality of
life, increase productivity, enable new
opportunities, or address societal challenges.
Iterative Process:
• Technological innovation often involves an iterative
and continuous process of refinement, learning,
and adaptation. It may go through multiple stages
of research, development, testing, feedback, and
improvement to reach its full potential.
Improvement:
• Technological innovation aims to enhance existing
technologies, products, or processes by introducing
advancements, efficiencies, or better performance.
It seeks to overcome limitations, solve problems, or
meet emerging demands.
Implementation :
• Technological innovation involves the practical
implementation and deployment of new
technologies or processes. It requires translating
ideas and concepts into tangible products, services,
or systems that can be effectively used or adopted.
Innovation concept
• Innovation is a comprehensive concept that can not
be defined by using a singular factor. We mentioned
concept, precisely because innovation can be seen
as a process, mentality, culture, technology, human
resources and many other notions that are at the
basis of it.
• Two types of innovation – product
innovation and process innovation. These two
categories are regularly present on the market,
these days, being part of an approach to innovation
that is based on its objective.
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 • Product innovation is a type of innovation that is more
noticeable for the consumer and it is related either to the
enhancement of a company’s older products, either to the
development of new products which are based on new
technologies or which solve new needs of a consumer.
• When product innovation is conducted through the
development of a new product, it can either solve an older
consumers’ problem in a new (innovative) way, or solve a
new consumers’ problem, which occurred as a consequence
of the evolution of the factors previously mentioned – social,
cultural and economical.
Apple
• Apple is probably one of the companies which have the most well‐
known product innovations. Starting from the role that the company
had in the evolution of the first personal computers in the 70s, to all
the types of smartphones they released in the past 10 years, Apple is
surely a leader on the market when talking about product
innovation.
The Nature and Effects of technology
Innovation
• Schumpeterian Industries (the nature of high‐tech
industries) named after Joseph Schumpeter,
according to him only firms with some degree of
monopoly power would likely have the incentive and
the ability to invest in risky, expensive, and long term
research and development projects.
• Process innovation focuses on the innovation of
facilities, skills and technologies used for the
production and delivering of products and
services. As opposed to product innovation, the
effects are not as noticeable to the consumers.
• Product innovation can result in a decrease in
production cost and time and the improvement of
certain processes or the elimination of certain
barriers from the production process or
consumption.
The Nature and Effects of technology
Innovation
• Rapid technology change has many important effects
in the world around us. Three that are worth special
mention are the product life cycle, the nature of high
tech (knowledge), and creating comparative
advantage.
• Product life cycle it illustrates how technological
change leads to globalization of production. With
regards to process or product innovation, the process
innovation has become perhaps the more important
technological innovation.
The Nature and Effects of technology
Innovation
• Creating Comparative Advantage – to have an
advantage in producing something compared to
other countries.
• High – value – added – goods are products that
generate substantial income flows for the firms and
workers that produce them. Some nations that have
demonstrated remarkably the ability to create
comparative advantage in the production of high
value added goods are Japan, the Asian “Tigers”
which are Hong Kong, South Korea, Taiwan, and
Singapore.
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From Invention to Innovation
Innovation – What is it?

While invention depends upon creativity, The creation of new ideas/processes which will
successful technological innovation lead to change in an enterprise’s economic or
requires integrating new knowledge with social potential
multiple business functions.

[P. Drucker, ‘The Discipline of Innovation’, Harvard

Business Review, Nov-Dec, 1998, 149]

What is Innovative Thinking? Obstacles to Successful Innovation

• A means of generating innovation to achieve two
objectives that are implicit in any good business • Competitive position
strategy:
• make best use of and/or improve what we have today • Market judgement
• determine what we will need tomorrow and how we can best
achieve it, to avoid the « Dinasaur syndrome »
• Technical performance
• Innovative thinking has, as a prime goal, the object of
improving competitiveness through a perceived • Manufacturing expertise
positive differentiation from others in:
• Design/Performance • Financial resources
• Quality
• Price
• Uniqueness/Novelty

Innovation
There are several types
How to classify newness and degree of of new products. Some
innovation and what to focus on: are new to the market,
some are new to the
firm, and some are new
to both. Some are minor
• New to the firm? modifications of existing
• First in the market? products while some
are completely
• First in the world? innovative
• Incremental or radical innovation?

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 Introduction to the Innovation Process The Innovation Process
• An innovation starts as an idea/concept that is refined and
Invention • The adoption of an developed before application.
innovation by similar firms • Innovations may be inspired by reality (known problem). The
• Usually leads to product or innovation (new product development) process, which leads to
useful technology, requires:
process standardization
• Research
Innovation • Products based on • Development (up‐scaling, testing)
imitation often are offered • Production
at lower prices but with • Marketing
fewer features • Use
Imitation • Experience with a product results in feedback and leads to
incrementally or radically improved innovations.

The IPE of Technology and Intellectual Property

The Innovation Process Rights

Translation of a Creative Idea into Useful • Intellectual Property Rights are the rights of
Application controlling the use of intellectual property, an
innovation or a creative work such as a novel or
Analytical Organizing Implementation Commercial poem.
Planning Resources Application

To Identify: To Accomplish: To Provide:

To Obtain:
- Product - Organization - Value to Customers
- Materials
Design Product Design - Rewards to
- Technology
- Market - Manufacturing Employee
- Human
Strategy - Services - Revenue to Investors
Resources
- Financial - Satisfaction of
Capital
Need Founders

The IPE of Technology and Intellectual Property The IPE of Technology and Intellectual Property
Rights Rights

• Patents are issued by a government and confer the

• Property Rights are the rights control use the use of exclusive right to make, use, or sell, an invention for a
something, such as house, or a car, or a book. period generally ranging from fifteen to twenty years.

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The IPE of Technology and Intellectual Property Rights
• Trademarks are signs or symbols registered by a
manufacturer or merchant to identify goods and
services. Protection usually granted for ten years
and is renewable.
Minitest – 45 minutes
1. Summarize the four main contributions of
Marxism to contemporary structuralism.
2. Which of the three IPE approaches best accounts
for the relationship of the Northern industrialized
nations to the Southern developing nations when
it comes to trade? Explain and discuss.
Copyright © 2003 Pearson Education, Inc.
• Non‐rival knowledge is the knowledge one firm
uses can also be used by other firms
• Rival knowledge the knowledge or resources used
by one firm cannot be used by another one.
The IPE of Technology and Intellectual Property Rights
• Copyrights a type of intellectual property that gives
the creator of an original work, or another right
holder, the exclusive and legally secured right to
copy, distribute, adapt, display, and perform a
creative work, usually for a limited time
Copyright © 2003 Pearson Education,
Inc.
The IPE of Technology and Intellectual Property
Rights
• One goal of the Uruguay Round of the GATT
negations was to reach some agreement regarding
intellectual property rights.
• The result of this round was the Trade Related
Aspects of Intellectual Rights (TRIPS) agreement,
which requires some minimum level of IPR
(intellectual Property rights) enforcement for all
member of WTO (World Trade Organization).
Copyright © 2003 Pearson Education,
Inc.
Three Perspectives on Intellectual
Property Rights
• The Liberal Perspective of IPR says that the
international protection of IPRs is essential if the
world market economy is to enjoy the extraordinary
benefits of rapid technology growth.
• This perspective adds that the winners in this
process will be consumers and the world overall,
and the only real losers are the firms that won’t be
able to profit from the copying of the creative,
innovative ideas.
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 Three Perspectives on Intellectual
Property Rights
• Mercantilists see knowledge as being a source of
national wealth and power. Production is the true
measure of a nation’s wealth and power. Nations must
develop and then closely guard their own technology,
and technology controlled by other nations must be
acquired.
• The protection of IPRs for domestic firms is clearly
appropriate in order to foster domestic technological
innovation. Equal protection of foreign technology is
unlikely to be in the national interest.
Three Perspectives on Intellectual
Property Rights
• The structuralists contend that IPRs increase the
dependency theory of the periphery on the core.
• IPRs are just tools of dependency. So the core
nations or the developed countries make use of the
semi‐peripheral or peripheral countries which are
developing or third world countries for their own
benefits.
Copyright © 2003 Pearson Education,
Inc.
North – South Conflicts Over Intellectual
Property Rights
• The north all the time refers to the developed
countries, so if there will be any question with like
North Commission or South commission, know that
north is developed countries and south if
developing countries.
Three Perspectives on Intellectual
Property Rights
• Protect only your national firms domestically and
internationally.
• List and Hamilton argue that just like the free trade
benefits mostly developed countries in expense of
developing countries, the protection of IPRs benefits
those nations with the most advanced technological
capabilities at the expense of the less technologically
developed nations.
• In this aspect the mercantilist and structuralist thought is
similar.
North – South Conflicts Over Intellectual
Property Rights
• This section is basically about the two views of the
IPRs, to promote even more the protection of IPRs
or let it loosen up for a little so that developing
countries have higher rates of development.
• It relates to things that we have discussed in class,
how the developed countries emphasis the
protection of IPRs heavily, where is other countries
don’t because they see it as means of controlling
them.
North – South Conflicts Over Intellectual
Property Rights
• Jeffrey Sachs, Harvard University, argues how
today’s world is less divided by ideology than by
technology. Many regions particularly the poorest
tropical countries are technologically excluded
regions.
• Sachs recommends a fundamental change in World
Bank policies: a move away from a country‐based
model entailing conditionality provisions to a
broader focus on the creation and dissemination of
knowledge for development.
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 Minitest – 45 minutes

• End of chapter 7 1. Summarize the four main contributions of

Marxism to contemporary structuralism.
2. Which of the three IPE approaches best accounts
for the relationship of the Northern industrialized
nations to the Southern developing nations when
it comes to trade? Explain and discuss.

Copyright © 2003 Pearson Education, Inc.

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