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such as licensing, imports of equipment or government–firm technologytransfer). Currently, intellectual property rights are benefiting mostly the TNCs operating in the local market, as the local firms are not sufficiently specialized to protect their innovations under the current IPR regime, which in any case may not be appropriate for the types of incremental innovations in which most firms engage. For the large majority of local firms there was no observable positive impact of intellectual property rights on licensing, technology transfer or technology sourcing through foreign subsidiaries.

The only important sources of innovation at the firm level are the firms’ own innovation efforts and innovation through imitation/copying. Although the study found that intellectual property rights do not contribute to new product/process development in any of the three sectors, domestic entrepreneurs had serious concerns regarding the impact of intellectual property rights on their inputs, such as seed availability and seed price. Larger firms tended to view IPRs differently and in a more benevolent light than the smaller firms, as a tool through which they could protect their products and secure benefits. Others, which regarded IPRs as detrimental to innovation, based their assessment largely on the indirect impact of IPRs on increasing prices of seeds and other inputs. In the textiles and ready-made garment sector, most of the firms interviewed were of the view that IPRs did not play any role as an inducement for innovation, because they simply assembled the final output according to precisely given, buyer-determined specifications, since they did not possess any indigenous design-related capabilities. The firms in the pharmaceutical sector were very concerned that since foreign firms can obtain patents
on their products in the country, this might adversely affect their efforts to venture into reverse engineering of active pharmaceutical ingredients.

The patents on pharmaceutical products (approximately 50 per cent of the 182 granted in 2006) are not on local innovations, and this point to the presence of other reasons for patenting, such as strategic use, monopoly profits and prevention of parallel imports. It will be important conduct more studies of this type. But many experts in the area of IPRs now argue that “one size does not fit all’, implying that the design and implementation of IPR policies need to consider the impact of varying levels of development and countries’ initial conditions. IPR protection has historically followed rather than anticipated economic and technological development. There is thus a significant movement towards thinking about how to add a development dimension to IPR regimes. As the Secretary-General of the United Nations, Mr. Ban Ki-moon, put it, when speaking at the opening of ECOSOC’s session on 16 April 2007, “The rules of intellectual property rights need to be reformed, so as to strengthen technological progress and to ensure that the poor have better access to new technologies and products”.