Essay on the Innovation and Intellectual Property System in Vietnam
In the last two decades, Vietnam has gone through major changes in economic system and institutional system. These changes have sky-rocked the growth of non-SOE and attracted more foreign investments, while decreasing a considerable number of SOE through process of privatization or dissolve. In 2009, non-SOEs were accounted for over 96% of total firms and contributed about 46% to the GDP, while foreign firms and SOE were accounted about 2.4% and 1.6% of total firms, but respectively contributed 19% and 35% to GDP. Despite the fast growing in GDP, Vietnam has shown that its institution, science and technology and education are not supporting its development’s state.
Although, there has been an increasing in both number of patents filed and patent granted since the last two decades, the number of patents has been very small in comparison to many other developing countries in the region. This at least confirmed that Vietnam’s science and technology is still primitive and therefore, policy makers should find ways to stimulate firms’ innovation.
As, innovation is an economic indicator, and it has been widely measured by many researchers through the propensity to patent. Relying on the Oslo manual and the work of Peteers and van Pottelsberghe (2003), this research utilizes the form of questions and the structure of analysis to determine manufacturing firms’ characteristics and their competencies, which might indicate firms’ innovation. The two sources of data: the World Bank data and an in-depth interview with active technological firms have been used for analysis. Applying probit regression function with patent is the dependent variable on this set of data. The empirical outcomes suggest that the age and legal business types of the firm are the determinant characteristics of firms’ innovation. Further analysis found that firm’s innovation is also reflected through its innovation culture, such as: rewarding scheme; studying support; and involving with program CT168. Moreover, the empirical findings also acknowledge that supplier, customer, university personnel and patent document are critical external sources for innovative ideas. In addition to those competencies, personal competence has also found to be significant importance for firms’ innovativeness.
Since, patent is used to analyze firms’ innovation, taking this opportunity this research dives through the patenting system in developing ASEAN countries and China. This research found that FDIs positively correlated with the patent filings that imply that FDIs stimulate innovation. Furthermore, the relationship between patenting cost and demand for patent is followed a non linear traditional demand curve. Lower cost may stimulate more patents but increase workload for patent examiners, leading to the issue of patent quality. These findings suggest that patent cost can be used as a tool to stimulate patent filings.
Appropriability conditions have been perceived as weak in Vietnam. Administrative measure is the most common tool, which has been exercised in fighting for infringements. Taking 40 infringement cases, which have been recorded by NOIP and MOST, this research found that the values of fines are often much smaller than the actual infringed amounts. This reflects that the amount of fine is bounded by the maximum amount of fine (about 24,000 USD), which was ruled by the administrative execution ordinance. This explains that why most of infringement cases are handled by administrative measure. In addition to this study also found that administrative measure took much less time than court proceeding. The time required for court proceeding might take 10 or more times longer than the administrative procedure. This suggests that the regulation needs to be adjusted and administrative procedure in the judicial measure needs to be reformed.
Standing at the point of a policy maker, this research suggests that there should be one short term plan and one long term plan. In a short term, the government should provide more IP knowledge to people and firms through programs, such as CT168. Furthermore, working condition and infrastructure are essentially needed to be reformed for employees to generate new ideas. In addition to that, this dissertation also suggests a mechanism that allows industry and academic institution jointly collaborate for development of a new product or a new process. In a longer term plan, reformation on
administrative measure, judicial measure and education are essential. Administrative measure should be limited to identifying problems, collecting evidences, and filing for a prosecution in criminal case. Further reformation to administrative procedure in judicial system is essential to allow people and firms easily access courts for trials. Furthermore, the maximum amount of fine should be ruled to about 2.5 times of real value of the goods, which are being infringed. In spite of the weaknesses of the education system and its importance for firms’ innovation, a complete reformation in teaching curriculums is a must and it should create positive effects on all stake holders.
