AylorB_Unit10a1_ResearchPaper_FinalPoject

AylorB - Collaborating Innovations Tuesday, June 16, 2015 0 of 26

COLLABORATING INNOVATION WITH DEVELOPING REGIONS

An Exploration of IPR Protection Levels and Moderating GDP for Innovation

By: Bonnie Aylor / 2030815

For: BMGT8010 / Spring 2015 / Unit10a1 / Dr. Tony Pizur

AylorB - Collaborating Innovations Monday, June 1, 2015 1 of 26

By: Bonnie Aylor / 2030815

For: BMGT8010 / Spring 2015 / Unit10a1 / Dr. Tony Pizur

Abstract

After researching a market introduction of a Smart Car into the BRICS regions of India

(Aylor, 2015), a team of researchers designed a project to introduce more sustainable energy

systems into the region. There is only one problem – there is a need to design a strategy that will

allow innovations to survive in the low IPR region. This study examines the ability of low IPR

to support innovation within a developing region. Unlike past research this, this study looks to

find out how innovation can be creating in the midst of current situations, and then to find a way

to get around current systems so that the IPR protection problem is overridden. The final

conclusion finds that weak IPR does facilitation innovation in developing countries, but only

imitation designs. The research suggests the need for open systems of innovation, co-creation,

and knowledge sharing coupled with the need for stronger IPR protections with a broader range

of acceptable items approved for patenting. There are some recommendations for future

research.


Table of Contents

Abstract ........................................................................................................................................................... 1

Introduction ..................................................................................................................................................... 3

A Solution ................................................................................................................................................... 3

Economic Significance ............................................................................................................................... 4

Generation of Innovation - Macroeconomics .................................................................................................. 4

Effect on the Firm - Microeconomics ............................................................................................................. 5

Dealing with Developing Regions................................................................................................................... 5

Research Question: .......................................................................................................................................... 6

What is IPR?.................................................................................................................................................... 6

IPR within the USA .................................................................................................................................... 7

IPR within India ......................................................................................................................................... 8

Comparison................................................................................................................................................. 8

Importance of Anticipation ......................................................................................................................... 9

The Legacy of Informal Protections ......................................................................................................... 10

What is Innovation? ...................................................................................................................................... 12

Open vs Closed Innovation ....................................................................................................................... 12

IPR, Innovation, WTO, TRIPS and 2-Game Theory ..................................................................................... 14

Innovation and SMEs .................................................................................................................................... 16

Contributing Innovation to Development ...................................................................................................... 16

Co-Creating Innovation ................................................................................................................................. 17

Discussion and Conclusion ........................................................................................................................... 18

References: .................................................................................................................................................... 21


Introduction

During a marketing study being administered to introduce a smart car into one BRICS

country (Aylor, 2015), a team of researchers exercise the task to analyze the most viable BRICS

member, according to a specified list of factors, which can determine a sound market economy

based on the specific product of focus. Since the Smart car originally of choice for the market

entry runs on electricity (Aylor, 2015), the team places a high priority on the suitability of the

energy infrastructure within each country under analysis. During the analysis a determination

finds that India and a non BRICS country - South Korea, have the most sufficient energy

structure (Aylor, 2015). Since the team wants to focus on the BRICS countries, and South Korea

is a largely volatile market in the focal product area, the team decides to choose India. There is

just one problem - India's energy infrastructure is counterproductive to the purpose of the

product.

A Solution

In order to bypass the problem so that the Smart car can be sold there, a plan a plan

designed. First of all, the team decides that it is best to start by introducing the petrol version of

the same car (Aylor, 2015). Secondly, to make the car more competitive, a computerized system

is designed for the car to help the customers detect road hazards, car problems, and service issues

ahead of time, before the issue can become compounded and additional devices are needed

(Aylor, 2015). The implementation of this plan requires networking with local small mechanics

facilities to administer service plans and warranties when issues surface that require the cars to

go under repair (Aylor, 2015). The final leg of the plan includes the expansion of network

connections so that the company can introduce some of the new experimental designs in

sustainable energy (Aylor, 2015). The company wants to begin conducting some of that


necessary research within India so that new designs can be built to meet the independent needs of

India alone.

Economic Significance

There are a few economic principles that can be applied to such a situation. Economists

have to think of the micro scale when considering the benefits to either the initiating firm, or

even to the individual firms that will be involved with the sales of the automobiles inside of

India. They would also need to think on the macro scale in terms of the effect these

technologies would have on development inside of India, and within the general economy of the

globe as an indirect effect of the effort. Firms would also have to consider World Trade

Organizations (WTO) standards related to intellectual property rights (IPR) when doing business

between the two nations (Gerber et al, 2011), and what types of things were required for

regulation under those standards between the two nations. One important thing to consider when

addressing the usefulness of an effort such as this involves the way that IPR, as regulated by the

WTO, effects the ability for a developed nation to trade with a developing nation, and for those

two nations to collaborate emergent technologies.

Generation of Innovation - Macroeconomics

According to Weinhold & Nair-Reichert (2009), innovation emerges from two different

conditions of the market - when there is a need to bring in more products, and when there is a

large demand for products and a need to find ways to supply. These authors also find that the

need for more products tends to effect the creation of IP for local entities, while increased

demand tends to effect the rate of IP generation for external entities (2009). However, according

to Hudson & Minea (2013), the pattern of IP generation is a little more complicated, such that IP

generation, otherwise known as innovation or emergent capital, tends to increase with increasing

IPR intensity, but only in relation to economies exercising a higher GDP. In lower GDP


economies, this effect may be reduced. One explanation that may serve to resolve this can be

defined in terms of theory presented by Nielson & Dane-Nielsen (2010) regarding the

differences between market value of intellectual capital and the value of the firm in relation to

the intellectual capital. When markets become more volatile, and external IPR becomes more

prevalent, the desire to innovate becomes reduced because there is no need to create a larger

market and demands are being sufficed for.

Effect on the Firm - Microeconomics

There are a couple of different mechanism where this effect generates from within the

firm. First of all, according to research conducted by Michie et al (2002), employees that are not

being compensated for their ability to create intellectual property are no longer concerned with

the generation of it, and they will leave the firm. So when markets are volatile, IPR is

unregulated, and companies are not being compensated as they should, employees tend to leave

the firm and there is no longer any social capital available to generate the IP (Michie et al, 2002).

This is further backed by Nielson & Dane-Nielson's (2010) depiction of IP of the internal firm on

three different dimensions - the individual, the team or group, and the entire firm. In this

depiction, the individual employee generates IP of different components of the product, then the

team combines these separate components into one general product with its own IP, and this IP

gets transferred into the IPR of the entire firm (2010). Without the IP generation of the

component parts, it is increasingly more complicated to provide that final product.

Dealing with Developing Regions

Economists are mixed in regards to the ability to use IPR to generate innovation in

developing regions. However, as expressed by Stachowitz-Stanuch (2012), the economic

sufficiency of a nation can be partly derived from a factor related to the number of IPR's held as


internal to the nation. In research conducted by Lanio et al (2011), it was determined that the

level of protection regarding IPR is directly related to the ability to create new environmental

innovations when dealing with environmental regulation - such that the more protections there

are the more comfortable the firm is that the ideas will be protected, even when made public.

While Hudson & Minea (2013) find that GDP moderates IPR and innovation, Lania et al (2011)

find that IPR protection can further moderate the effect of GDP. Stachowitz-Stanuch (2012)

found a tight relationship between IP and perceived corruption, but were not able to discover

what the relationship is. It is possible that lack of protection may create hesitation and that

highly volatile markets may be composed of too much IP from outside sources to be effective on

internal economies while employees move from one employer to another and share IP secrets in

order to gain a greater income.

Research Question:

This research will explore the connection between IPR protections and the ability for

developing nation to create innovations, and the relation of this level of innovations on resulting

economic value of the nation. The question under study will be: What effect do the protections

provided by the WTO towards IPR effect the ability for a developing region to collaborate

innovation with a developed region in efforts to create more development?

What is IPR?

In order to conduct a thorough examination on intellectual property (IP) rights (IPR) and

the ability for them to moderate innovation, researchers must first develop an understanding of

what intellectual property is. When encountered with this question, many people immediately

think of written work - such as journal entries, books, screenplays, and other types of written

articles. However, intellectual property concerns a much wider array of intellectually derived


materials (USPTO, 2015). The Merriam-Webster (2015) online dictionary provides a simple

definition and a full definition. The simple definition is just something that comes from the mind

(2015). The full definition is defined as property that carries a license, or other type of legally

defined rights document, that is derived from the mind (2015). In most instances, the definition

remains the same globally - however, there may be some difference in regards to the types of

IPR under protection in each region.

IPR within the USA

The United States has been known as a country that honors strong IPR. In the United

States, IPR is regulated through the patents and trademarks office (USPTO, 2015). This is the

office that allows for citizens to register for a IPR license - such as a copyright, trademark,

patent, title, or other legally defining document describing what a person has created and the

dynamics of what that person owns and for how long (USPTO, 2015). The United States even

requires such protections as the registering of website domains, and the expiration thereof, even

after the original rights have been admonished due to nonrenewal or lack of use (USPTO, 2015).

Patents, copyrights, and trademarks have timeframes of activation that allow owners a good

amount of time to earn money from their work before the rights dissolve. For instance, music

artists own the rights to their songs for 25 years and then then they can be dissolved and other

artists can easily make their own version without obtaining permission from the original artist

(USPTO, 2015). These right withhold even after the death of the artist. Trademarks dissolve

after 75 years and also withhold after the death of the original IPR rights holder (USPTO, 2015).

However, there are protections for dealing with international constituents and local IPRs

(USPTO, 2015). These include trade sanctions, the disallowance of local sales and other fees

that intercept piracy regimes from doing business within the borders (USPTO, 2015). The United

States is strict on protecting the rights of IP creators within the country's borders.


IPR within India

India also has a specific policy that governs intellectual property rights. Information

about India's patent laws are available through the World Intellectual Property Organization

(WIPO) (2015), as well as on India's patent website (IpIndia, 2015). According to their most

recently amended Patent Policy Act for 2005 (WIPO, 2015), there are a lot of different type of

inventions that are not applicable for a patent. There is also a long provision that excludes most,

if not all, anticipatory rights (WIPO, 2015). The IPR registrations include patents, designs, and

trademarks (Ipindia, 2015). The patenting process is self-explanatory - there is a long form that

requires detailed information and specifications about the invention in multiple places on the

form, with no exceptions for missing information (IpIndia, 2015). There are also a list of

accompanying fees (IpIndia, 2015) - just like the USA. However, these patents can be

disapproved for reasons other than their workability or previous approval. Also, if one of the

inventors dies before the patent is approved, the name can be released from the document

(WIPO, 2015). Furthermore, although the policy does mention a time frame for the length of the

patent or right, it does not stipulate what that timeframe is (WIPO, 2015) - it's as if it just gets

written in once the patent is approved. Basically, the government has full discretion over IPR in

India.

Comparison

Even though both countries do have a set of patent rules, there are some differences

between them. The first major difference has to do with what can and cannot be approved for a

patent (IPIndia, 2015; USPTO, 2015). To start off, the United States has more IPR registration

documents than just patent and trademark, including a copyright license and side mark, and

special protections for certified Native American products and insignia (USPTO, 2015). The

United States is relatively interested in the protection of ideas and intellectual research


(Copyright, 2015) - items that are excluded from India's Patent Policy, listed as ineligible for

patent (IpIndia. 2015). The United States patent law includes a provision that those inventions or

patentable items that were displayed in any sort of medium in front of any type of audience will

maintain ownership to the original entity that displayed it, as long as the patent is applied for

within in one year (USPTO, 2015). In India, this is not allowed (WIPO, 2015). India has a tight

provision of secrecy for their patents where they are not to be published until the patent is out of

date (WIPO, 2015), whereas the America's are strict about publishing in that patents have to be

published during the application process and they have to be published while under the terms of

the patents (USPTO, 2015) so that others can know what is already protected and what it not.

India's laws also exclude discoveries of scientific processes in nature and other inventions

that have no objective reason for exclusion (WIPO, 2015). In the United States, an invention can

be granted on the objective quality that it is workable at the time of application and approval

(USPTO, 2015). India offers no protection for the arts and aesthetics (IPIndia, 2015), whereas a

major form of IPR protection in the US involves arts and aesthetics (USPTO, 2015). Games are

excluded from protection in India (WIPO, 2015), but are highly protected in the US under

trademarks, copyrights, and even patents if the games are workable (IPIndia, 2015). In

summary, the US offers patents for just about anything - if the thing is workable for what it is

supposed to be at the time that the patent is applied for, and there are no other patents with the

same thing regardless of the novelties of it, then the patent will be granted (USPTO, 2015) -

which is largely separate from India's patent system where there are not many things that are

acceptable for patents.

Importance of Anticipation

There are some important factors related to the ability to use display as a cause of gaining

ownership over a patent before the application is begun. For instance, in May, 2015, Mercedes


(Ceramics, 2015) came out with a brand new concept car - G-code. It features paint that

produces solar electricity, a new powerful motor concept, individually heated and cooled seats

with massagers, and many other luxuries that one of these cars are able to inhabit within them

(Ceramics, 2015). Since the US patent laws require that the thing under application for a patent

has to already be working (USPTO, 2015), companies will often begin to display their designs

publicly - as a concept, before attempting to apply for the patent. This is so that when the

company engineers are nearing the finalization of the design, the designs don't get stolen due to

another business operating at a perato efficient competitive advantage (Gerber et al, 2011) - a

faster manufacturing time. Since the company can display the concept and know that they are

going to be safe for at least a year from that point (USPTO, 2015), they are much less reluctant

to continue progression of the new design concept. Another provision of the US patent policy

that ties in with this situation is that the patent of the concept does not have to be exactly the

same, as long as it is apparent that the machine under patent came from that concept (USPTO,

2015). It's like saying - Hey bud, you wanna try the size of this design?

The Legacy of Informal Protections

Aside from the protection of IPR through instruments such as patents, licenses, and

trademarks, organizations can use informal protections such as lead time, first mover, and lock-

ins. Argowal & Gort (2001) describe the way in which lead times and first mover advantages

can lead the market, creating a pocket where the innovation is unique in its quality and design,

such that it is hard for other market contenders to match. One aspect of this technique is in the

use of production methods that charge a lot of expenses upon market entry (Argowal & Gort,

2001). When this technique couples with a high consumer demand for the product, the new

design gets locked-in (Liebowitz & Margolis, 1995). What makes the product stay in such high

demand even after contenders are able to create duplicates is partly in regard to the trust that


consumers have in the use of the product (Liebowitz & Margolis, 1995). There is also a factor of

stress involving trust for the first mover, including a high regard for first mover intelligence

(Shapiro & Varian, 1999). Another factor is in regards to new movement of the original product

by the first mover manufacturer such that consumers are enjoying what is new and are not

interested in the duplicates that are made with old designs (Argowal & Gort, 2001; Hasdink,

2007; Liebowitz & Margolis, 1995). This change element is what makes lead time so important

- being able to change the new design before the other market contenders are able to catch up

puts the first mover at a position as to claim the expert title, while the other market players are

just following along (Agowal & Gort, 2001). While these competitive protection types are

highly effective, many economists contend that formal protections, such as patents, licenses, and

trademarks, are considerably stronger, especially when dealing with the global marketplace.

Many economists believe that formal protections of IPR can go hand in hand with

informal methods to increase efforts towards innovation. Liebowitz & Margolis (1995) show

how lock-ins tend to hold up the market for innovation since other market players don't see a

reason to create new designs that are outcompeted prior to themselves entering the market.

Argowal & Margolis (2001) explain that patents mitigate the market so that lead times become

decreased due to a lack of fear by other market contenders to present their new designs, and an

absence of the need to create market barriers related to entry expenditures by first movers. This

scarcity of need for higher entry costs related to patents allows lower budget entrants to relegate

the market first more often (Argowal & Margolis, 2001). This is because the patents mean that

the design won't be stolen, so any future designs have to be different than the first market mover

(Gerber et al, 2011), and a lack of barriers won't get the design stolen. In essence, while the

techniques used for informal protections are strong, formal IPR protections are stronger when


using protections to generate innovation. Put another way - in order for other market contenders

to make it on the market, they have to innovate to prove they are still experts.

What is Innovation?

In order to define the way that IPR effects innovation, or even the importance of

innovation, it is first imperative to define what innovation is. According to Atuahene-Gime

(2012), innovation is a new way to solve a problem. Professor John Linton PhD (2007) shows

how innovation can take many different forms. He mentions revolutionary innovations,

evolutionary innovations, product and process innovations, and continuous vs discontinuous

innovation (Linton, 2007). Any single innovation can take on any single form of these

innovation types, or it can be a combination of different types that explains its purpose for being

generated (Linton, 2007). According to Costello & Prohaska (2013), innovation is simply doing

something different - but it has to be productive, something that does good for the company.

Google (2015) defines innovation as a new method or idea. The Business Dictionary (2015) also

defines innovation as something different that provides a valuable return to the company.

Gulshan (2011) includes business methods and processes as a significant part of innovation. In

essence, innovation is change that is profitable.

Open vs Closed Innovation

Innovation has many different constructs or genres and types. One major difference

between the USA and India regarding innovation, as indicated via IPR licensing requirements

(IPIndia, 2015; USPTO, 2015), is that of the open system vs the closed system of innovation.

Gulshan (2010) describes an open system more like exchanges between the internal organization

and the external market, such that innovative system might begin with materials or innovations

designed in the external environment and then used as a platform in the internal organization, or

improved upon by the internal organization - whereas a closed system involves that which is


discovered and generated internally. Wang et al (2010) explain open innovation as the inflow

and outflow of information that includes technologies, acquisitions, and knowledge flows - that

fosters innovation. Wang et al (2010) provide a list of factors effecting innovation and name IP

protections as one of those factors - such that a greater level of protection could affect open

innovation systems positively depending on the IP holder's view of such systems since

proprietary knowledge is protected despite multi-directional flows. Chesbrough & Appleyard

(2007) define open innovation such that it involves the polling of knowledge resources so that a

single emerging technologies cannot be entirely claimed as the exclusive right of one entity, but

more like a public good - even though it is patentable. Unlike other authors, Chesbrough &

Appleyard (2007) limit their concept of open innovation to social media networks to explore the

way in which open innovation provides a world of free knowledge sharing that can be used in the

internal organization to help generate innovations. These researchers take an IP approach to

their look to open systems, whereas others are taking a more process approach.

Many researchers notice that open innovation effects the general process of innovation

inside of firms. Huizingh (2010) provides a responsibility definition to his concept of open

innovation where firms receive inputs towards innovation and, in return, supply the market with

outputs so that innovation can flourish externally. Haironi et al (2009) also agree with this

definition. Finally, Vrande et al (2009) define open innovation as a process in which knowledge

is disseminated outside the firm to leverage external technological advances, and acquired

internally of the firm in order to enhance the firm's own technological advances. The consensus

is that innovation is no longer a confined process of research and discovery that eventually

divulges a new product or process, but it is now an interaction where firms improve upon each

other's advancements to create even greater advances than were previously conceived.


This system of open innovation has some operatives that define how it works. For

instance Gulshan (2010) mentions software platforms that make it so that businesses can search

for data between networks and retrieve from and contribute to computerized knowledge systems.

Huizingh (2010) mentions one method of open innovation facilitation involves open networks

where gain access to open platform systems for sharing information between each other.

Likewise, Chesbrough & Appleyard (2007) stress the use of social media forums where

information is shared and disseminated for free, allowing for a large reduction in expenses.

Vrande et al (2009) mention a need for a system to more easily capture, control and monitor data

retrieved from the social media resources. One thing that each one of them agree to is that open

innovation conduces more internal innovation through the use of public and semi-public display

- and that strong IP protections can serve as an enabler of it. However, one researcher,

Huizinghh (2010), mentions the alternative value creation methods: lead times, first mover

advantages, and lock-ins.

IPR, Innovation, WTO, TRIPS and 2-Game Theory

In order to determine the beneficial effects of innovation and IPR's on development, one

must consider all relevant facts that can assert influence on the distribution of that wealth. One

major influence on that distribution of wealth has to do with the World Trade Organization and

related treaties, such as TRIPS. The TRIPS agenda would allow nations to continue to exercise

the first seller's rights throughout international regions, carrying the same individual IPR licenses

for each region, but would require an exhaustion (Chiapetta, 2000). The consequences of the

TRIPS is that countries holding the original license are able to maintain a better return on

international sales of IP when the rights are not exhausted (Chiapetta, 2000). Most developing

regions prefer for the rights to exhaust so that they can benefit from the reduced value generation


of the products (Chiapetta, 2000). Most developed regions do not want the IPR protections to

exhaust because they want to get compensated for their own IP as the first mover, and they do

not want to have to contend with the development of generic products that are made from the

exhausted protections of a protocol product (Chiapetta, 2000). This would make it hard for a

developed nation to want to do business with a developing region past the length of the original

protections.

The WTO also encourages free trade among international regions. Although this is true,

most regions do not completely comply with the free trade agenda (Gerber et al, 2011). The

Unites States is able to use facets of free trade regulation in order to regulate the protection of

their IPR in international regions. For instance, a recent article about the US trading with India

specified how the United States is able to control its trade policies in order to provide

consequence with IPR's are not protected on external regions (Fintech, 2012). In fact, the US

imposed extra fees on visa's and placed a ban on outsourcing (Fintech, 2012). Although the US

and India may be under a Free Trade Agreement (Jagadeesh & Sasidharan, 2014). The US can

still take prerogatives to ensure that the IPR that are sent overseas are still being compensated.

In a recent article regarding IPR and TRIPS in India, officials admitted that the stronger

IPR protections appeared to generate more innovation in pharmaceuticals than with the weaker

protections (Jadadeesh & Sasidharan, 2014). India signed the TRIPS agreement in 1994

(Jagadeesh & Sasidharan, 2014). Even so, the TRIPS treaty still has not gone into effect, stating

in it's documents mainly that it failed to gain approval (Chiapetta, 2014). In an article by Inside

Washington (2013), it has been discovered that India is starting to look past the TRIPS to

consider other elements related to compulsory license. Officials in India have also voiced

concerns about the SME industry within India and the increasing levels of innovation coming


from that sector (Jagadeesh & Sasidharan, 2014) - with these businesses showing more R&D

productivity when they are able to obtain patents for it. This indicates that India may be more

willing to eventually strengthen their IPR protections.

Innovation and SMEs

Small and medium enterprises (SMEs) are important parts of the developing economy,

especially in regions where corruption abounds. According to Radas & Brozic (2009), SMEs are

integral to innovation within these companies because they need to contribute the innovation to

survive. However, there are specific factors that allow these small income firms to survive and

contribute (Radas & Brozic, 2009). According to Sikka (1999), SMEs need to be able to obtain

knowledge and resources with their limited amount of money, and many time they engage in

alliances in order to do it. Vrande et al (2009) find that when SMEs undergo acts of open

innovation, they are more able to obtain knowledge from external environments and at a much

lower rate, in exchange for giving knowledge into the external environment. Radas & Brozic

(2009) find that one of the major determining factors of SME success is their ability to

collaborate on technologies and knowledge. This is not far from Sikka's (1999) finding that

policy fostering the success of SME's would entail the use of government provision of

technologies and facilitation of R&D. All of these findings point to the important of open

systems of innovation for SMEs and, indirectly, a need for stronger IPR protections that will

foster the ability to engage is open systems of innovation.

Contributing Innovation to Development

In order to generate for innovation in order to increase sales, revenue flows, and

ultimately economic thresholds in developing regions, one needs to discover the best way to

encounter IPR protections that can allow innovation to contribute to such development. The


debate has mainly been regarding whether strong IPR protections contribute to or take away for

the ability to develop in low GDP regions (Hudson & Minea, 2013). According to Chen &

Puttitanun (2004), it isn't necessarily a measure of the GDP, or the level of developing versus

developed - it's rather a measure of the ability to derive the knowledge for innovations that

evolve outside of imitation. Developing regions will need lower IPR protections as they attempt

to imitate another country's technologies in order to put it on the market for themselves, as their

knowledge build through this practice of imitation then the strength of IPR protection should

increase so that they are able to create brand new innovations that are either incremental or

radical (Chen & Puttitanun, 2004). Hudson & Minea (2013) break down this sort of change in

an economic framework and find that there are certain levels of IPR that should be attached to

certain levels of GDP, that are incremental rather than either or. In Radas & Bozic (2009)

analysis of the SME industry in developing regions, they also found that the reason for the lack

of innovation lied within the realm of the lack of knowledge regarding innovation. Sikka (1998),

in his analysis of technological innovations in SMEs within the borders of India, found that a

major contributing factors was lack of knowledge and lack of resources - he recommends

collaboration, government facilitation of resources, and a gradual strengthening of IPR to

provide a more inviting atmosphere for collabroation.

Co-Creating Innovation

One solution that as offered Radas & Bozic (2009) was in the clustering of firms into

industry zones in order to share resources. Sikka (1998) also mentions that many firms have

tended to form alliances with other technologically astute MNCs in order to have the required

technologies provided at a much better rate. Wang et al (2012) also show how networked

systems of knowledge sharing have become a major part of the open innovations infrastructure.


However, the open innovation system requires a tighter IPR protection system top operate in

such a way that more knowledgeable entities are willing to share their knowledge across them

(Huizingh, 2010). According to Vanchezwaren and Guatam (2011), SME's in India are starting

to generate greater levels of innovation by participating in Western style management practices

by joining globally competitive markets in sustainability - where they are gaining and sharing

knowledge from their global peers.

In order to provide an atmosphere where innovations in these developing regions get to

the level that they are increasingly positively effecting the gross domestic level, it is important to

continue to invite SME's (Radas & Brozic, 2009) to form open system of innovation through the

facilitation of computerized knowledge systems, social media access, and networks or

knowledge and technology sharing (Huizingh, 2010). These systems can provide the

groundwork that SME's need through knowledge building and a minimal cost to them (Chen &

Puttanun, 2004) and catalyze the ability to move beyond imitative practices and move straight

into the incremental and radical levels of innovations (Sikka, 1998), where they are developing

new products. The inclusion of co-collaborative methods of innovations - where the open

system becomes a partnership where organizations are generating innovations together and then

presenting them to the rest of the network as new innovations and for knowledge transfer

(Huizingh, 2010) will assist in the transition into this purely open market of innovation. In order

to facilitate this, it is imperative that IPR protections be strengthened (Vandre et al, 2009), and

then IPR approvals open up to a much wider array of IP items.

Discussion and Conclusion

Charged by recent research regarding the introduction of a Smart Car into the

predominantly coal powered region of India (Aylor, 2015), and the desire to be able to include


the Smart Car by assisting in the development and reformation of the energy structure through

intra-organization alternative energy R&D inside of the introductory corporation - it became

imperative to study the ability to generate innovation inside of a developing region with certain

levels of IPR so that the R&D systems could sustain (Gerber et al, 2011). In order to do that, it

was important to also understand the way that IPR protections effect innovation, and the way that

innovation works inside of a developing region (Hudson & Minea, 2013). This study analyzed

the general effect of IPR protections on innovation, the difference between open innovation and

closed innovation, what innovation was, how development effects SME's ability to innovate, and

what the differences are between IPR in the USA and India. Findings realized that the building

of open system innovation networks among SMEs inside of India combined with the co-creation

of innovation with MNCs could foster the optimal kind of development for a project that would

invite new energy systems inside of India and sustain the continued growth of such systems.

However, to encourage the development of this networked, innovative environment, India could

benefit from the increase of IPR protections with an expansion of the stipulation regarding which

IP items are eligible to receive formal IPR protections.

These results could benefit from some future research. First of all, research could be

conducted to find the correlation between open systems of innovation and co-creation of

innovation in order to better define the individual facets of each one. The results of this study

could be combined with a study of knowledge sharing alliances and the ability for knowledge

sharing within these three systems to catalyze the emergence of radical and incremental

innovation of the individual firm. Once the ability to catalyze such innovative creations has been

determined, an empirical cross examination of the three systems could be conducted in order to

determine which system is stronger for creating more advanced levels of innovation.


Furthermore, a study regarding the longevity of the ability of these systems to produce radical

and incremental innovations – including whether they tend to be specialized or transformative.

Also, a study should be conducted discovering of the provision of knowledge and co-creative

processes as capable of overriding the need for weak IPR protections in a developing economy

towards to creation of a larger number of advanced innovations. Finally, a study in the ability of

anticipatory rights in patent approval increases innovative practices and whether there is a

difference between the ability for it to increase innovation between developed and developing

regions.


References:

(July 29, 2013 ). Indian Minister Touts Local Content Policy Change, Rebuts IPR Criticism. Inside U.S.

Trade, Retrieved from www.lexisnexis.com/hottopics/lnacademic

Agarwal, R., & Gort, M. (2001). First‐Mover Advantage and the Speed of Competitive Entry, 1887–

1986*. Journal of Law and Economics, 44(1), 161-177.

http://www.jstor.org/stable/10.1086/320279

Atuahene-Gima, K. (2012). What is Innovation? African Business, 66-67. Retrieved from

http://search.proquest.com.library.capella.edu/docview/1146989298?accountid=27965

Aylor, B. (2015). Socially Responsible Development between the United States and India: An Ethical

Dilemma in Responsible Agendas. Researchgate.net. DOI: 10.13140/RG.2.1.4269.2644 Retrieved

from:

https://www.researchgate.net/publication/274138259_SOCIALLY_RESPONSIBLE_DEVELOPMEN

T_BETWEEN_THE_UNITED_STATES_AND_INDIA_An_Ethical_Dilemma_in_Responsible_Agendas

Candelin-Palmqvist, H., Sandberg, B., and Mylly, U. (2012). Intellectual Property Rights in Innovation

Management Research: A Review. Technovation, Volume 32, Issues 9–10, September–October

2012, Pages 502-512, ISSN 0166-4972, http://dx.doi.org/10.1016/j.technovation.2012.01.005.

(http://www.sciencedirect.com/science/article/pii/S0166497212000065)

Chen, Y. and Puttitanun, T. (2005). Intellectual Property Rights and Innovation in Developing Countries.

Journal of Development Economics, Volume 78, Issue 2, December 2005, Pages 474-493, ISSN

0304-3878, http://dx.doi.org/10.1016/j.jdeveco.2004.11.005. Retrieved from:

http://www.sciencedirect.com/science/article/pii/S0304387805000635

Chiapetta, V. (2000). The Desirability of Agreeing to Disagree: The WTO, TRIPS, International IPR

Exhaustion, and a Few other Things. 21 Mich. J. Int'l L. 333. Michigan Journal of International

Law. Retrieved from www.lexisnexis.com/hottopics/lnacademic

http://www.lexisnexis.com/hottopics/lnacademic

http://www.jstor.org/stable/10.1086/320279


https://www.researchgate.net/publication/274138259_SOCIALLY_RESPONSIBLE_DEVELOPMENT_BETWEEN_THE_UNITED_STATES_AND_INDIA_An_Ethical_Dilemma_in_Responsible_Agendas

https://www.researchgate.net/publication/274138259_SOCIALLY_RESPONSIBLE_DEVELOPMENT_BETWEEN_THE_UNITED_STATES_AND_INDIA_An_Ethical_Dilemma_in_Responsible_Agendas

http://dx.doi.org/10.1016/j.technovation.2012.01.005


http://dx.doi.org/10.1016/j.jdeveco.2004.11.005


http://www.lexisnexis.com/hottopics/lnacademic


Chiaroni, D., Chiesa, V., and Frattini, F. (2011). The Open Innovation Journey: How firms Dynamically

Implement the Emerging Innovation Management Paradigm. Technovation, Volume 31, Issue 1,

January 2011, Pages 34-43, ISSN 0166-4972,

http://dx.doi.org/10.1016/j.technovation.2009.08.007. Retrieved from:


Copyrights. (2015). United States Patents and Trademarks Office. Retrieve from:

http://www.uspto.gov/learning-and-resources/ip-policy/copyrights

Costello, T., & Prohaska, B. (2013). Innovation. IT Professional, 15(3), 64. doi:10.1109/MITP.2013.42

Retrieved from:

http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=tru

e&db=iih&AN=87803631&site=ehost-live&scope=site

Gulshan, S. S. (2011). Innovation Management: Reaping the Benefits of Open Platforms by Assimilating

Internal and External Innovations. Procedia-Social and Behavioral Sciences, 25, 46-53. Retrieved

from: http://www.sciencedirect.com/science/article/pii/S1877042811023548

Hassink, R. (2007). The Strength of Weak Lock-ins: The Renewal of the WestmuĞnsterland Textile

Industry. Environment and Planning A, 39, 1147-1165. doi:10.1068/a3848 Retrieved from:

http://core.ac.uk/download/pdf/6961003.pdf

Hudson, J. and Minea, A. (2013). Innovation, Intellectual Property Rights, and Economic Development: A

Unified Empirical Investigational. World Development, Volume 46, June 2013, Pages 66-78, ISSN

0305-750X, http://dx.doi.org/10.1016/j.worlddev.2013.01.023.

(http://www.sciencedirect.com/science/article/pii/S0305750X13000296)

Huizinghh, E. K. (2011). Open innovation: State of the Art and Future Perspectives. Technovation, 31(1),

2-9. Retrieved from: http://www.pishvaee.com/wp-

content/uploads/downloads/2013/09/open-innovation-review-2011.pdf



http://www.uspto.gov/learning-and-resources/ip-policy/copyrights

http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=iih&AN=87803631&site=ehost-live&scope=site



http://core.ac.uk/download/pdf/6961003.pdf

http://dx.doi.org/10.1016/j.worlddev.2013.01.023

http://www.sciencedirect.com/science/article/pii/S0305750X13000296

http://www.pishvaee.com/wp-content/uploads/downloads/2013/09/open-innovation-review-2011.pdf

http://www.pishvaee.com/wp-content/uploads/downloads/2013/09/open-innovation-review-2011.pdf


Innovation. (2015). Google Search. Retrieved from: https://www.google.com/webhp?sourceid=chrome-

instant&rlz=1C1CAFA_enUS638US640&ion=1&espv=2&ie=UTF-8#q=what%20is%20innovation

Intellectual Property India. (2015). Controller General of Patents, Designs, and Trademarks. Government

of India. Retrieved from: http://www.ipindia.nic.in/

Jagadeesh, H., & Sasidharan, S. (2014). Do Stronger IPR Regimes Influence R&D Efforts? Evidence from

the Indian Pharmaceutical Industry. Global Business Review, 15(2), 189-204. Retrieved from:

http://gbr.sagepub.com.library.capella.edu/search/results

Lanoie, P., Laurent-Lucchetti, J., Johnstone, N., & Ambec, S. (2011). Environmental Policy, Innovation and

Performance: New Insights on the Porter Hypothesis. Journal Of Economics & Management

Strategy, 20(3), 803-842. doi:10.1111/j.1530-9134.2011.00301.x

Lee, S., Park, G., Yoon, B., & Park, J. (2010). Open Innovation in SMEs—An intermediated Network

Model. Research policy, 39(2), 290-300. Retrieved From:

http://moodle.technion.ac.il/file.php/1292/Dana_Katz/Open_innovation_on_SMEs-

_An_intermediated_network_model.pdf

Liebowitz, S. J., & Margolis, S. E. (1995). Path Dependence, Lock-in, and History. Journal of Law,

Economics, and Organization, 11(1), 205-226. Online ISSN 1465-7341 - Print ISSN 8756-

6222 Retrieved from:

http://www.researchgate.net/profile/Stan_Liebowitz/publication/5213887_Path_Dependence_

Lock-in_and_History/links/0912f50f76930756f2000000.pdf

Malerba, F. (2002). Sectoral Systems of Innovation and Production. Research policy, 31(2), 247-264.

doi:10.1016/S0048-7333(01)00139-1 Retrieved from:

http://www.azc.uam.mx/socialesyhumanidades/06/departamentos/relaciones/Pdf.%20De%20c

urso%20de%20MESO/Malerba2002-Sistemas%20sectoriales.pdf

https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C1CAFA_enUS638US640&ion=1&espv=2&ie=UTF-8#q=what%20is%20innovation

https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C1CAFA_enUS638US640&ion=1&espv=2&ie=UTF-8#q=what%20is%20innovation

http://www.ipindia.nic.in/

http://gbr.sagepub.com.library.capella.edu/search/results

http://moodle.technion.ac.il/file.php/1292/Dana_Katz/Open_innovation_on_SMEs-_An_intermediated_network_model.pdf

http://moodle.technion.ac.il/file.php/1292/Dana_Katz/Open_innovation_on_SMEs-_An_intermediated_network_model.pdf

http://www.researchgate.net/profile/Stan_Liebowitz/publication/5213887_Path_Dependence_Lock-in_and_History/links/0912f50f76930756f2000000.pdf

http://www.researchgate.net/profile/Stan_Liebowitz/publication/5213887_Path_Dependence_Lock-in_and_History/links/0912f50f76930756f2000000.pdf

http://dx.doi.org/10.1016/S0048-7333(01)00139-1

http://www.azc.uam.mx/socialesyhumanidades/06/departamentos/relaciones/Pdf.%20De%20curso%20de%20MESO/Malerba2002-Sistemas%20sectoriales.pdf

http://www.azc.uam.mx/socialesyhumanidades/06/departamentos/relaciones/Pdf.%20De%20curso%20de%20MESO/Malerba2002-Sistemas%20sectoriales.pdf


Martin, D. M., & Schouten, J. W. (2014). Consumption-Driven Market Emergence. Journal Of Consumer

Research, 40(5), 855-870. doi:10.1086/673196

Mercedes-Benz's New Concept Car Harvests Run with its Paint. (2015). American Ceramic Society

Bulletin, 94(1), 21. Retrieved from:

http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=tru

e&db=iih&AN=100243249&site=ehost-live&scope=site

Merriem-Webster Dictionary. (2015). Innovation. Retrieved From: http://www.merriam-

webster.com/dictionary/intellectual%20property

Michie, J., Oughton, C., & Pianta, M. (2002). Innovation and the Economy. International Review Of

Applied Economics, 16(3), 253-264. doi:10.1080/02692170210136091

Nielsen, C., & Dane-Nielsen, H. (2010). The Emergent Properties of Intellectual Capital: A Conceptual

Pffering. Journal of HRCA : Human Resource Costing & Accounting, 14(1), 6-27.

doi:http://dx.doi.org/10.1108/14013381011039771

Radas, S. and Božić, L. (2009). The Antecedents of SME Innovativeness in an Emerging Transition

Economy. Technovation, Volume 29, Issues 6–7, June–July 2009, Pages 438-450, ISSN 0166-

4972, http://dx.doi.org/10.1016/j.technovation.2008.12.002. Retrieved from:


Shapiro, C., Varian, H. R., & Becker, W. E. (1999). Information Rules: a Strategic Guide to the Network

Economy. Journal of Economic Education, 30, 189-190. DOI: 10.2139/ssrn.1706450 Retrieved

from: http://vedpuriswar.org/Book_Review/Business_Strategy/Information%20Rules.pdf

Sikka, P. (1999). Technological Innovations by SME's in India. Technovation, Volume 19, Issue 5, February

1999, Pages 317-321, ISSN 0166-4972, http://dx.doi.org/10.1016/S0166-4972(98)00126-6.

Retrieved from: http://www.sciencedirect.com/science/article/pii/S0166497298001266



http://www.merriam-webster.com/dictionary/intellectual%20property

http://www.merriam-webster.com/dictionary/intellectual%20property



http://vedpuriswar.org/Book_Review/Business_Strategy/Information%20Rules.pdf

http://dx.doi.org/10.1016/S0166-4972(98)00126-6



Stachowicz-Stanusch, A. (2013). The Relationship between National Intellectual Capital and Corruption:

a Cross-National Study. Journal Of Business Economics & Management, 14(1), 114-136.

doi:10.3846/16111699.2012.667831

Unites States Copyright Office. (2015). http://www.copyright.gov/

United States Patent and Trademark Office. (2015). http://www.uspto.gov/

Vancheswaran, A., & Gautam, V. (2011). CSR in SMEs: Exploring a Marketing Correlation in Indian SMEs.

Journal of Small Business and Entrepreneurship, 24(1), 85-98,153. Retrieved from


Visa Fee, Ohio Ban to Figure in India US Trade Policy Forum Meet. (2010). Accord Fintech. Retrieved

from http://search.proquest.com.library.capella.edu/docview/751922489?accountid=27965

Vrande, V., de Jong, J. P.J., Vanhaverbeke, V., & Rochemont, M. (2009). Open Innovation in SMEs:

Trends, Motives and Management Challenges. Technovation, Volume 29, Issues 6–7, June–July

2009, Pages 423-437, ISSN 0166-4972, http://dx.doi.org/10.1016/j.technovation.2008.10.001.

Retrieved from: http://www.sciencedirect.com/science/article/pii/S0166497208001314

Wang, Y., Vanhaverbeke, W., and Roijakkers, N. (2012). Exploring the Impact of Open Innovation on

National Systems of Innovation — A Theoretical Analysis. Technological Forecasting and Social

Change, Volume 79, Issue 3, March 2012, Pages 419-428, ISSN 0040-1625,

http://dx.doi.org/10.1016/j.techfore.2011.08.009. Retrieved from:


Weinhold, D. and Nair-Reichert, U. (2009). Innovation, Inequality and Intellectual Property Rights. World

Development, Volume 37, Issue 5, May 2009, Pages 889-901, ISSN 0305-750X,

http://dx.doi.org/10.1016/j.worlddev.2008.09.013.

(http://www.sciencedirect.com/science/article/pii/S0305750X08003185)

http://www.copyright.gov/

http://www.uspto.gov/





http://dx.doi.org/10.1016/j.techfore.2011.08.009


http://dx.doi.org/10.1016/j.worlddev.2008.09.013

http://www.sciencedirect.com/science/article/pii/S0305750X08003185


What is Innovation? (2012). Chain Store Age, 88(5), 2-18A,19A. Retrieved from



Date post:	06-Aug-2015
Category:	Documents
Upload:	renee-reagan
View:	36 times
Download:	0 times

AylorB_Unit10a1_ResearchPaper_FinalPoject

Documents