The Emergence Of Information And Knowledge Economics

Arguably, the dominant form of technological change in the last 25 years has been in the area of information, communications, and data processing. Over the last 25 years, we have witnessed drastic reductions in the cost of data processing and the proliferation of computer use among families and small firms, emergence of global communications networks that enable instantaneous financial transactions and fast, massive transfer of data across locations, and establishment of a network of satellites that facilitate monitoring of resource management with a high degree of accuracy. The emergence of the information economy has important implications for both biotechnology and biodiversity in terms of its impact on the capacity to develop new technologies and the institutions that are needed to promote such development, the introduction of modern production methods which are responsive to environmental heterogeneity, the analysis and monitoring of agricultural production impacts on environmental conditions, and the ability to inform and mobilize large groups of people over large geographic distributions.

The development of biotechnology has benefited largely from the increase in computational abilities. Biotechnology is data intensive, and mapping of genes would not have been feasible without advanced computer technologies. With information-intensive technologies such as biotechnology, most of the economic value is not attributed to equipment (hardware) but, rather, to management knowledge and information (which are in many cases embodied in software). Thus, with the evolution of information technologies, we have seen much more emphasis on establishing definitions and enforcement criteria for IPRs. Without the ability to capture accrued rents using software or new knowledge of information, private parties would not have the incentive to develop these items. Therefore, both patent and copyright laws have been modified to protect IPRs, and the extent of their coverage is being expanded through international trade agreements such as the TRIPS agreement under the WTO.

Establishing and protecting international IPRs for biotechnology innovations is a major challenge. A narrow definition of IPRs for biotechnology innovations may not provide sufficient incentives to cover R&D costs. On the other hand, a definition that is too broad may give owners of these rights excessive monopolistic power and deter access and further innovations by others. IPRs for the knowledge embodied in biotechnology need to take into account the contribution that indigenous knowledge has played in the development of an innovation and assign value to these rights accordingly. However, assigning property rights to goods that were previously freely available and exchanged among farmers could also reduce the accessibility to those resources and actually reduce diversity (see Chapter 9).

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