Addressing intellectual asset building in Bangladesh

Dhaka,  Wed,  20 September 2017
Published : 17 Mar 2017, 20:51:48

Addressing intellectual asset building in Bangladesh

M Rokonuzzaman
In many indicators, Bangladesh has been making progress. Among them, Bangladesh's foreign currency reserve, growth rate in gross domestic product (GDP) and per capita GDP are worth of citing. Such growth is primarily attributed to commercialisation of labour. On the backdrop of saturation of labour-centric industrial job creation, and growing supply of university graduates, Bangladesh's next phase of growth is likely to originate from intellectual capacity. Creation of intellectual asset and its commercialisation is the next growth challenge as well as opportunity for Bangladesh.

Despite the growth in common indicators and accelerated investment in physical infrastructure, unfortunately, Bangladesh has been on the declining trend in creating intellectual asset base. According to available data, patent application by local individuals and institutions, a key measure of intellectual asset, has declined from 58 in 2003 to 40 in 2015.

Of those 40 applications, only 11 have been granted patents. During this period, in patent granting, the pick reached in 2004 with 28 acceptances.

Such declining trend has been a concern about Bangladesh's preparedness to experience economic growth from creation and commercialisation of intellectual assets-by capitalising intellectual capacity of graduates as opposed to physical strength of unskilled labour force.

Despite the progress in relevant fields, like increase in the number of universities, faculty members, number of science and engineering graduates, research funding and expansion of private sector, it's quite disappointing to observe that Bangladesh' intellectual asset creation, in the form of patent applications and acceptance, has remained virtually stagnant since independence.

Why has there been the declining trend in creating intellectual assets is a major concern. Such concern could be a major constraint for Bangladesh to keep up with her aspiration of reaching high-middle income status by 2030.

In the recent past, there has been phenomenal growth globally in building intellectual assets, primarily patents, to attain the commercial edge. After the end of the Cold War, there has been growing race in building patent portfolio among nations.

For example, between 1970 and 2012 the number of patents granted by the United States Patent and Trademark Office increased almost fivefold, from little less than 50,000 in 1970 to almost 300,000 in 2014.  According to World Intellectual Property Organisation (WIPO), there has been a sharp growth in global patent filling, from around 125,000 in 2000 reaching 2.7 million in 2014.

Although China has been the driver of growth with 928,177 filings in 2014, many other developing countries are making noticeable progress.  For example, Indonesia and Thailand have reported 7.7 per cent and 7.1 per cent growth in patent fillings respectively. Vietnam, Turkey and the Philippines have recorded 11.3 per cent, 9.4 per cent and 9.3 per cent growth respectively.

The obvious question would be about the steps Bangladesh should take to reverse the trend in respect of intellectual asset building. It appears that Bangladesh's funding in R&D (Research and Development) is extremely low in comparison to global top performers.

For example, South Korea has been investing over 4 per cent of GDP to R&D. The likely suggestion could be to increase the funding for R&D. But the productivity of R&D activities is also another concern to be addressed. According to data obtained from different sources, it appears that Bangladesh invested almost USD900 million for the purpose of R&D in 2015.

This investment has produced only 40 patent applications, costing USD22.5 per application. On the other hand, South Korea's R&D investment of almost USD60 billion produced 210,292 patent applications in 2015.

It appears that USD0.28 million produces each patent application in Korea as opposed to Bangladesh's USD22.5 million. Apparently, Bangladesh is 80 times less productive in intellectual asset creation than South Korea. Even in the USA, it cost only USD0.83 million to generate each of 578,802 patent applications in 2014.

It appears that Bangladesh is one of the least productive countries to produce patent application. Such poor productivity must be addressed before Bangladesh proceeds with the increase in R&D funding to an acceptable level as a percentage of GDP, to build necessary intellectual asset stockpile.  

The next question is about the source of R&D financing. Is it the sole responsibility of the government to make this funding? The role of the government and the private sector should be clearly thought out in addressing both productivity and sharing the responsibility of financing. As the private sector is the engine of economic growth of Bangladesh, the likely beneficiary of the intellectual assets would be the private sector.

The most important issue appears to be the commercialisation of intellectual assets. There is a strong possibility that weak or no participation of the private sector in R&D financing will likely lead to sub-optimal commercialisation (or wastage) of produced intellectual assets. But at the early stage, due to high perceived risk, there is a strong possibility that private sector will be reluctant to increase its exposure to R&D financing.

Here is a policy challenge for the government to create the appetite for R&D financing among private enterprises for the purpose of addressing profit maximisation.

At the backdrop of the high growth trend of intellectual asset building among competing countries, Bangladesh's declining trend in patent filing is a serous cause of concern.

On the other hand, extremely poor R&D productivity is alarming. Creating demand among private enterprises for increasing R&D financing is a major policy challenge for the government. Given this scenario, it's imperative that Bangladesh should address three burning issues: 1. Address extremely low R&D productivity; 2. Create the urgency of R&D financing among private enterprises; and 3. Increase public fund for R&D.

In this globally competitive economy, Bangladesh must address the intellectual asset building issues and create the urgency among private enterprises to turn those assets into competitive edge to expand economic growth.

The progress in the area of creating intellectual assets and turning those assets into the capacity to produce high quality products at lower cost will largely determine Bangladesh's rate of progress towards being a high-middle income country.     

M Rokonuzzaman Ph.D, academic, researcher and activist on Technology, Innovation and Policy, is Professor, Department of Electrical and Computer Engineering, North South University, Bangladesh.


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