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Compiled by the Government Communication and Information System Date: 06 Jun 2008 Title: Intellectual property in Africa can alleviate poverty - WEF -------------------- By Shaun Benton Cape Town - A key report on intellectual property in Africa, which can show how African firms can retain profits, was launched at the World Economic Forum on Africa on Thursday. Called "Distinctive values in African Exports: How intellectual property can raise export income and alleviate poverty", it was produced by an organisation called Light Years and funded by the Department for International Development in the United Kingdom. The report found that effective intellectual property strategies can raise African producers' incomes by up to 320 percent, compared to traditional aid models, which can raise incomes by only about 1.6 percent a year. "In sub-Saharan Africa, something quite new is happening with intellectual property," the report states, adding that intellectual property is increasingly being used in business strategies to boost the export incomes of large numbers of African producers. Light Years IP studied 14 product sectors, had found that these sectors have the potential to increase export income from $1.1 billion per year, to between $2.5 billion and $3.5 billion per year. If applied properly to sub-Saharan exports, which earn an estimated $9 billion per year, these strategies would increase the export income in this region to between $20 billion and $27 billion per year. The report notes the dramatic increase in the intangible value of products over recent decades, finding that this has now overtaken the physical value of products as the main source of corporate income. Now, with the value of intangible assets at the top end of the value chain, intellectual property strategies are more important than ever. The report argues that Africa could develop business strategies with IP (intellectual property) built-in when exporting to developed country markets where value is dominated by IP. At the moment, states the report, "valuable returns from IP are being captured in the importing country and not in the African country of origin". Up to now, the authors argue, strategies for export development in Africa have relied too heavily on increasing the production of commodities and establishing new processing or manufacturing plants. This has put African countries in "intense competition" with other developing countries that are also increasing production and manufacturing. The report outlined a number of areas where African countries could receive more of the value from their products. For instance, Ethiopian coffee, it says, is recognised as being among the best in the world. "However, the significantly high retail prices for these coffees were being enjoyed by foreign coffee distributors and retailers, while the producers were compensated at very low levels - around five percent to 10 percent of the retail price." In one sign of success, the report pointed to a successful IP-based business strategy initiated by cocoa farmers in Ghana. A cooperative set up called Kuapa Kokoo - which in turn helped to establish the Fairtrade chocolate marketing company Divine Chocolate Ltd - now brands its product, which is becoming well known in developed country markets and allowing the producers to receive a major share in the brand and a significant share in the profits. When it comes to modern technology, the opportunity for trading on more equal terms is now better for Africa, says the Chief Executive Officer of Light Years IP, Ron Layton. "Transmission of digital products has dramatically levelled the playing field for Africa, a change unprecedented in world trade," Mr Layton said. More than 800 participants from around 50 countries engaged with each other in the 18th World Economic Forum on Africa, which ends on Friday. - BuaNews |
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