PRIVATIZATION OF RESEARCH

 

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TITLE: excerpt from New Technologies & the Global Race for Knowledge

AUTHOR: United Nations Development Programme

PUBLICATION: Human Development Report 1999, Chpt 2, pp 66-76

DATE: July 1999

SOURCE: Oxford University Press

NOTE: UNDP's annual Human Development Report focuses this year on

globalisation. It may be downloaded in full from

http://www.undp.org/hdro/report.html

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"The relentless march of intellectual property rights needs to be stopped

and questioned."

-- UNDP, Human Development Report 1999

 

[Excerpt from Chapter 2]

 

PRIVATIZATION OF RESEARCH

 

The knowledge sector is a fast-growing area of the global economy: between

1980 and 1994 the share of high-technology products in international trade

doubled, from 12% to 24%. Yet in the 1990s, with many governments facing a

squeeze on budgets, the proportion of public funding for research and

development in science and technology has fallen around the world, to be

replaced by private industry. Research and development has also shifted away

from developing countries. Their share in the global total dropped from 6%

in the mid-1980s to 4% in the mid-1990s.

 

The trend has been particularly strong in agriculture and biotechnology. In

the early 1980s most crop and seed development in the United States was

under public research. Patents were rarely sought and rarely enforced;

saving and trading of seed was commonplace. This changed when new

legislation encouraged closer cooperation with the private sector, enabling

companies to profit from products developed largely with public funds. The

intellectual property of public and university research was increasingly

passed over to private industry: the portion of public sector patents in

biotechnology sold under exclusive licence to the private sector rose from

just 6% in 1981 to more than 40% by 1990.

 

With increasing privatization of research and rising costs for risky

innovations, the 1990s have seen a boom in the number and value of mergers

and acquisitions. The biggest year ever was 1998, especially for

biotechnology, telecommunications and computing industries. As a result

economic power has consolidated among a very few players. By 1995 the

world’s top 20 information and communications corporations had combined

revenue of more than $1 trillion -- equivalent to the GDP of the United

Kingdom.

 

In biotechnology genetic engineering underlies the new direction of

pharmaceuticals, food, chemicals, cosmetics, energy and seeds. This is

blurring the boundaries between the sectors, creating mega “life sciences”

corporations. Indeed, across all knowledge-intensive industries, a select

group of corporations controls ever-growing shares of the global market. In

1998, how much of the global market did the top 10 corporations in each

industry control? In commercial seed, 32% of a $23 billion industry; in

pharmaceuticals, 35% of $297 billion; in veterinary medicine, 60% of $17

billion; in computers, almost 70% of $334 billion; in pesticides, 85% of $31

billion; and in telecommunications, more than 86% of $262 billion. The

lesson is clear: privatization does not automatically lead to competition.

 

TIGHTER INTELLECTUAL PROPERTY RIGHTS

 

At the creation of the World Trade Organization in 1994, the most

far-reaching multilateral agreement on intellectual property was drawn up:

Trade-Related Aspects of Intellectual Property Rights, or TRIPS.

 

The past two decades have seen a huge rise in patent claims. The World

Intellectual Property Organization’s Patent Cooperation Treaty accepts a

single international application valid in many countries. The number of

applications made annually soared from less than 3,000 in 1979 to more than

54,000 in 1997 -- and those applications in 1997 were equivalent to nearly

3.5 million individual national applications. According to the director of

research and development at one of the largest biotechnology corporations,

“the most important publications for our researchers are not chemistry

journals but patent office journals around the world.”

 

Yet the claims to intellectual property are concentrated among very few

countries.

 

Industrial countries hold 97% of all patents worldwide. In 1995 more than

half of global royalties and licensing fees were paid to the United States,

mostly from Japan, the United Kingdom, France, Germany and the Netherlands.

Indeed, in 1993 just 10 countries accounted for 84% of global research and

development, controlled 95% of the US patents of the past two decades and

captured more than 90% of cross-border royalties and licensing fees -- and

70% of global royalty and licensing fee payments were between parent and

affiliate in multinational corporations. By contrast, the use of

intellectual property rights is alien to many developing countries. More

than 80% of the patents that have been granted in developing countries

belong to residents of industrial countries.

 

IMPACTS ON PEOPLE

 

These new rules of globalization -- privatization, liberalization and

tighter intellectual property rights -- are shaping the path of technology,

creating new risks of marginalization and vulnerability:

 

* In defining research agendas, money talks louder than need -- cosmetic

drugs and slow-ripening tomatoes come higher on the list than a vaccine

against malaria or drought-resistant crops for marginal lands. Tighter

control of innovation in the hands of multinational corporations ignores the

needs of millions. From new drugs to better seeds for food crops, the best

of the new technologies are designed and priced for those who can pay. For

poor people, the technological progress remains far out of reach.

 

* Tighter intellectual property rights raise the price of technology

transfer, and risk blocking developing countries out of the dynamic

knowledge sector in areas such as computer software and generic drugs.

 

* New patent laws pay scant attention to the knowledge of indigenous people,

leaving it vulnerable to claim by others. These laws ignore cultural

diversity in creating and sharing innovations -- and diversity in views on

what can and should be owned, from plant varieties to human life. The result

is a silent theft of centuries of knowledge from developing to developed

countries.

 

* Despite the risks of genetic engineering, the rush and push of commercial

interests are putting profits before people.

 

PRIVATE RESEARCH AGENDAS -- MONEY TALKS LOUDER THAN NEED

 

Genetic engineering is largely the product of private commercial research in

industrial countries. The top five biotechnology firms, based in the United

States and Europe, control more than 95% of gene transfer patents. It can

take 10 years and $300 million to create a new commercial product -- so, not

surprisingly, companies want to protect their innovations and ensure that

they reap profits. But this approach focuses research on high-income

markets. In 1998, of the 27 million hectares of land under transgenic --

genetically altered -- crops, more than 95% was in North America and Europe.

Research has focused on the wants of rich farmers and consumers: tomatoes

with longer shelf lives or herbicide-resistant soya beans and yellow maize

to be used mainly for poultry feed. Seed varieties are engineered to be

suitable for mechanized mass production with labour-saving techniques,

designed for industrial and intensive farming conditions.

 

Far less time and money have been given to the needs of farmers in

developing countries: increasing nutritional value, disease resistance and

robustness. Similarly, research is lacking on water-saving plant varieties

for smallholders. Instead, many major corporations are seeking patents for

the innovation of linking genetic characteristics to chemical triggers. What

for? One likely use is to create seeds that will germinate and bear fruit

only when used with the company’s brand of fertilizers or herbicides --

increasing sales through dependency on inputs. With agrochemical, plant

breeding and seed distribution companies merging into mega-corporations,

farming communities risk becoming caught in a chain of biological and

licensing controls.

 

Local plant breeding is essential for adapting seeds to the ecosystem and

maintaining biodiversity. The 1.4 billion rural people relying on farm-saved

seed could see their interests marginalized. With increasing control and

homogenization of the market by major agri-businesses, the competitiveness

of alternative varieties and the scope for producing alternative crops will

most likely decline, depleting local genetic diversity.

 

In the pharmaceutical industry private interests cannot be expected to meet

all public needs. Almost all research on diseases in developing countries

has been done by international organizations or the military in industrial

countries. Of the annual health-related research and development worldwide,

only 0.2% goes for pneumonia, diarrhoeal diseases and tuberculosis -- yet

these account for 18% of the global disease burden. In the United States

between 1981 and 1991, less than 5% of drugs introduced by the top 25

companies were therapeutic advances. Some 70% of drugs with therapeutic gain

were produced with government involvement. Vaccines are the most

cost-effective technologies known in health care, preventing illness in a

one-time dose. But they generate smaller profits and have higher potential

liabilities than treatments used repeatedly. As a result a consortium of US

pharmaceutical companies has united to develop antiviral agents against HIV,

but not to produce a vaccine against AIDS.

 

TIGHTER INTELLECTUAL PROPERTY RIGHTS ARE BLOCKING DEVELOPING

COUNTRIES FROM THE KNOWLEDGE SECTOR

 

The costs of industrial catch-up for Japan and the first-tier newly

industrializing economies in East Asia were greatly reduced by the weak

enforcement of intellectual property rights in the region before the

mid-1980s. Tighter control under the TRIPS agreement has closed off old

opportunities and increased the costs of access to new technologies.

 

In the pharmaceutical industry, prior to the TRIPS agreement, countries such

as China, Egypt and India allowed patents on pharmaceutical processes but

not final products. This approach supported the development of domestic

industries using different methods to produce mainly generic drugs, similar

to but far cheaper than the original brand names. The difference is

highlighted by contrasting drug prices in Pakistan, where there are patents,

to India, where there are none.

 

When Glaxo Wellcome launched AZT as an inhibitor of AIDS, it cost $10,000

per patient each year. As sales increased, the price fell to $3,000 -- still

far out of reach for most people in developing countries. An Indian company

then produced a generic -- Zidovir 100 -- and exported it to Belgium,

Tanzania and Uganda at less than half the price. The TRIPS agreement

requires 20-year patents on both processes and products, so India and others

must change national patent laws, making such opportunities impossible in

the future. As gene therapy comes to dominate the pharmaceutical industry,

this will significantly limit the industry’s potential in developing

countries.

 

Countries can choose to require patent holders to give licences to

competitors -- but the process is long and the fees may be prohibitive.

Imposing price controls on industry, calculated as a mark-up on costs, is

another option, but multinationals often avoid low prices by using loopholes

in transfer pricing -- artificially inflating the cost of inputs transferred

from country to country within the multinational’s domain. In India

multinational companies have sometimes charged 2, 4 or even 10 times the

prices they would charge for inputs in Europe and the United States in order

to avoid controlled low prices. They have little interest in pricing drugs

for the market in developing countries because they are maximizing global,

not national, profits and do not want to set a low-price precedent.

 

In the computer industry, software is one of the fastest-growing areas and

can be a way for new countries to get into producing for the knowledge

sector. In 1994 the global market for final, packaged software was $79

billion, of which OECD countries accounted for 94%. With a small but growing

number of developing countries entering the competition, it is not

surprising that the battle over intellectual property rights for software is

a fierce one. Protection is certainly needed: programmes are expensive to

develop, while pirating them is cheap and easy. Even before Microsoft

launched Windows 95 at $100, it was on sale on the streets of Beijing for

$9. Many firms have lost billions of dollars of trade in this way. At the

same time excessively tight intellectual property rights would eliminate

competition and innovation in this industry underlying global

communications. A careful balance needs to be struck.

 

The TRIPS agreement followed the United States in placing software, like

music and novels, under copyright law, with strong and universal protection.

The United States has started to grant patents on software in addition to

copyright, creating stronger control over programme interfaces and

tightening control over the industry. But there is leeway. The TRIPS

agreement does not prohibit making copies for reverse engineering -- a

process of unravelling computer programmes to see how they work, generating

ideas and innovation. With programmes such as Word and Excel becoming

computing standards, reverse engineering is essential for smaller producers

to create software that is compatible and competitive, and it must be

protected in future reviews of the agreement. If it were forbidden, the

development of competitive products would be drastically limited. And

different computers around the world would not be able to interact with one

another -- defeating the aim of connecting the network society.

 

PATENT LAWS DO NOT RECOGNIZE TRADITIONAL KNOWLEDGE AND

SYSTEMS OF OWNERSHIP

 

Biodiversity is of great importance to drug development, and developing

countries are the source of an estimated 90% of the world’s store of

biological resources. More than half of the world’s most frequently

prescribed drugs are derived from plants or synthetic copies of plant

chemicals -- and this trend is growing. Plant-based drugs are part of

standard medical treatment for heart conditions, childhood leukaemia,

lymphatic cancer and glaucoma, with a global value over the counter of more

than $40 billion a year. In the same way that many Arab states benefited

from industrialization’s thirst for the petroleum that lay beneath their

land, so now biorich countries could have the chance to benefit from

biotechnology’s demand for the rare germplasm found on their land. Many

indigenous communities have a further claim to biotechnology’s bounty

because they have been the cultivators, researchers and protectors of their

plants -- indeed, it is their long-acquired knowledge of nature’s potential

that is valuable to pharmaceutical companies today. Bioprospectors have for

many years taken samples of plant material and documented their traditional

medicinal uses. Without the consent of local people, this knowledge has been

used to develop highly profitable drugs. In any other situation this would

be called industrial espionage -- theft of both the genetic materials and

the long-acquired knowledge of using them to develop medicines.

 

The rosy periwinkle found in Madagascar, for example, contains anti-cancer

properties, and drugs developed from it give $100 million in annual sales to

a US-based multinational pharmaceutical company, Eli Lilly -- but virtually

nothing for Madagascar.

 

Plant material was once treated as common property, but a landmark US legal

case in 1980 awarded a patent on a genetically altered organism, launching

the first step in the race to patent life. Yet patent laws were drawn up in

19th-century Europe during the industrial revolution; their legal frameworks

have been extended to cover global markets during the information

revolution. Three fundamental concerns:

 

* The inventions born of genetic engineering bring radically new

characteristics. Can a framework of property rights first designed to

protect industrial machinery really cope fairly and effectively with the

complexities of genetically manipulated organisms?

 

* Scientific research now takes place under a regime based on ownership and

control. It rewards research according to short-term profitability, not

according to the needs to protect biodiversity, ensure sustainable and

ethical use of genetic resources or meet the essential needs of people.

 

* The attempt to create a global market in property rights imposes one

conception of ownership and innovation on a culturally diverse reality,

benefiting private industrial research but not public institutes or farming

communities.

 

In 1995 two researchers at the University of Mississippi Medical Center were

granted the US patent for using turmeric to heal wounds. But in India this

was a long-standing art, common knowledge and practice for thousands of

years. To get the patent repealed, the claim had to be backed by written

evidence -- an ancient Sanskrit text was eventually presented as proof and

the patent removed -- but this only highlighted the absurd imposition of one

culture’s systems on another culture’s traditions.

 

As a result of these problems, there has been increasing recognition of the

need to protect the knowledge of indigenous people. The Convention on

Biological Diversity of 1992 recognizes the need to protect property rights

but also the need for companies to gain prior informed consent before

conducting research -- but this convention is not legally binding until

countries translate it into national law, and indigenous communities have

often received little attention or protection under national law.

 

In the absence of legislation, more and more strategic alliances are being

struck between pharmaceutical firms and governments or indigenous groups in

resource-rich countries. Merck Pharmaceuticals has an agreement with the

non-profit National Institute of Biodiversity, INBio, in Costa Rica to pay

$1.1 million for access to 10,000 plant and insect samples. If any leads to

a successful drug, Costa Rica would receive a 23% royalty share, yielding a

possible $20-30 million each year.

 

>From Australia and Ecuador to Thailand and Uganda, bioprospectors have made

agreements with local communities, taking out patents based on local

knowledge in exchange for a share of profits. Royalties promised are

commonly 12%, though sometimes as low as 0.1% and as high as 34%. Even if

just a 2% royalty were charged on genetic resources that had been developed

by local innovators in the South, it is estimated that the North would owe

more than $300 million in unpaid royalties for farmers’ crop seeds and more

than $5 billion in unpaid royalties for medicinal plants. But this rate is

low because negotiations are on an uneven footing. When one company wanted

to bioprospect in Yellowstone National Park, the United States Park Service

secured a 10% royalty share. Negotiating power is everything.

 

THE RUSH AND PUSH OF COMMERCIAL INTERESTS PROTECT PROFITS,

NOT PEOPLE -- DESPITE THE RISKS IN THE NEW TECHNOLOGIES

 

Genetically modified foods come from plants to which extra genes have been

introduced to add qualities such as resistance to pests or frost. The genes

are taken from other plants, animals or micro-organisms and are often

introduced by attaching them to a virus. There are several risks in this

process. Genes introduced to make plants tolerant to herbicides and

insecticides could escape in pollen and create highly resilient weeds that

displace other wild plants and change the balance of the ecosystem.

Similarly, over time powerful new strains of insects and weeds resistant to

herbicides and insecticides could develop. New toxins could have damaging

effects in the food chain, and viruses could escape from virus-containing

crops. The impacts could be particularly serious in developing countries

where biodiversity is high and essential for sustainable agriculture. Yet it

can take 10-15 years before environmental damage becomes evident. Despite

the

promised commercial gains, many developing countries are extremely concerned

about the potential impact.

 

The growing use of transgenic crops raises important issues -- about the

safety of transferring organisms into new environments, questions of

liability for damage that are not covered under international law and the

need for far more transparency in information. Responses to these issues

have varied dramatically.

 

The United States, exporting $50 billion of agricultural products a year and

planting transgenic varieties for 25-45% of its major crops, claims that

strict safety rules will impede billions of dollars of global exports

annually in seed, grains and even products like breakfast cereals and cotton

clothing. But consumer movements and farmers have often reacted strongly to

transgenic crops, pulling them out of fields and rejecting them in shops.

Ten years ago the risk of humans being infected by bovine spongiform

encephalopathy (BSE, or mad cow disease) was said to be negligible -- but it

happened. Once bitten, twice shy, European consumers especially are now

questioning altered foods. Science is moving so fast and so little

information has been shared, it is not surprising that people fear that

technology is out of control.

 

With new technologies, profits should not come first -- but nor should

panic. Precaution is needed, and this was the motivation for the Biosafety

Protocol under the Convention on Biological Diversity. The protocol would

require exports of genetically manipulated organisms to be approved in

advance by the importing country. The negotiations collapsed in February

1999 after the main exporting countries -- the United States, Canada,

Australia, Argentina, Uruguay and Chile -- fell into open disagreement with

the European Union and many developing countries. Biosafety is still

critical -- all the more so as transgenic crops become more widespread.

 

THE NEED TO RESHAPE TECHNOLOGY’S PATH

 

Policies are urgently needed to turn the advances in the new technologies

into advances for all of humankind -- and to prevent the rules of

globalization from blocking poor people and poor countries out of the

knowledge economy.

 

THE NEED TO BROADEN GOVERNANCE

 

Intellectual property rights were first raised in GATT in 1986 to crack down

on counterfeit goods. Their reach has gone far beyond that into the

ownership of life itself. As trade and intellectual property law

increasingly come to determine the path of nations -- and the path of

technology -- questioning present arrangements is not just about economic

flows. It is about preserving biodiversity, carefully considering the ethics

of patents on life, ensuring access to health care, respecting other

cultures’ forms of ownership and preventing a widening of the technological

gap between the knowledge-driven global economy and the rest trapped in its

shadows.

 

At a time of such dramatic breakthroughs in new technologies, it is

indefensible that human poverty should persist as it does. What is more

startling is that the current path could be leading to greater

marginalization and vulnerability of poor people. The relentless march of

intellectual property rights needs to be stopped and questioned.

Developments in the new technologies are running far ahead of the ethical,

legal, regulatory and policy frameworks needed to govern their use. More

understanding is needed -- in every country -- of the economic and social

consequences of the TRIPS agreement. Many people have started to question

the relationship between knowledge ownership and innovation. Alternative

approaches to innovation, based on sharing, open access and communal

innovation, are flourishing, disproving the claim that innovation

necessarily requires patents.

 

Broader governance is also needed in the communications industry. Governance

of the Internet has until recently been ad hoc and largely biased towards

the needs of high-tech countries. Debates over taxing electronic commerce,

allocating domain names and creating privacy laws need to be opened up to

include the needs and concerns of developing countries, which have an equal

interest in the evolution of this tremendous tool.

 

Participation in the governance of technology must also be widened. Race car

drivers would not be the best advisers on public transport, and scientists

at the cutting edge of the technological revolution cannot alone decide its

path. This calls for collaboration -- in national and global forums --

between industry, independent scientists and technicians, governments,

regulators, civil society organizations and the mass media.

 

PUBLIC INVESTMENT IN TECHNOLOGIES FOR DEVELOPMENT

 

The path of technology must be reshaped if developing countries are to see

an advance in sustainable agriculture, wide access to global communications

and improvements in the health of their populations. The new structure of

science requires new initiatives. New technologies promise many advances for

human development, but public institutions cannot afford them alone and

private industry will not develop them alone. Jointly they can. Innovative

policy is needed to ensure that much-needed solutions for human development

are pursued. Incentives are needed to turn research towards the pressing

needs of the world, not just of those who pay. One proposal is for the

Consultative Group on International Agricultural Research (CGIAR) to reroute

genetic research to wider needs.

 

A representative group of independent scientists is needed to identify the

critically important technological challenges -- those that, if solved,

would substantially improve the human development of the world’s poorest

people and address the global challenges to human security faced by all.

Every five years the group could offer financial incentives and public

recognition to researchers, public and private alike, for innovations that

would be used for global public interests. What would be high on the list?

In agriculture, sustainable, robust and biosafe crops. In medical research,

vaccines for malaria and HIV. In communications technology, personal

computers powered by solar strips and wind-up or dynamo drives, resistant to

sand and humidity; software for touch screens; and prepaid chip card

software for electronic commerce without credit cards. In environmental

science, diverse sources of renewable energy. What would fund such

initiatives? A levy on patents registered under the World Intellectual

Property Organization is one possibility. A levy of just $100 on each patent

would have raised $350 million in 1998 alone, equivalent to the annual

budget of the world’s largest international research organization in

agriculture, the CGIAR. Alternatively, funding could be reallocated from the

research subsidies, grants and tax breaks now given to industry.

 

PUSHING FOR CHANGE IN MULTILATERAL AGREEMENTS

 

The WTO is planning a review of the TRIPS agreement. But these discussions

must not simply push into new issues. Intellectual property rights

agreements were signed before most governments and people understood the

social and economic implications of patents on life. They were also

negotiated with far too little participation from many developing countries

now feeling the impact of their conditions. There is a clear need for a full

and broad review of existing legislation, not an additional, unsustainable

burden of new conditions.

 

The choice is not between patents on everything or on nothing. Rather, the

question is, how much should be patentable? How can the system be structured

to take into account diverse interests and diverse needs?

 

The review needs to ensure that the room for manoeuvre granted in the TRIPS

agreement is respected in practice. Interpretation of the agreement is

obviously not a unilateral matter, and proposals by developing countries

have often been rejected by G-7 countries keen to maintain their industrial

interests. In the event of disagreement, dispute resolution mechanisms

involve intense negotiating among lawyers -- expensive and complex. The

advantage in costs and expertise clearly does not lie with developing

countries.

 

To strengthen their bargaining positions in pushing for change, countries

need to present frameworks that provide alternatives to the provisions of

the TRIPS agreement. Work is already well under way. Many countries are

exploring possible sui generis legislation for plant varieties to protect

farmers’ rights. The difficulty is the need for legislation to meet many

diverse interests within each country. One strong and coordinated

international proposal is the Convention of Farmers and Breeders (CoFaB). It

offers developing countries an alternative to following European legislation

by focusing legislation on needs to protect farmers’ rights to save and

reuse seed and to fulfil the food and nutritional security goals of their

people.

 

For indigenous people’s interests, too, open debate is needed across

countries to bring together the most up-to-date thinking for use by

negotiators and policy-makers. The framework needs to consider collective

rights to knowledge and resources, the need for prior informed consent for

use of materials and knowledge -- not just the consent of the government but

also of the indigenous groups concerned -- and the need for transparency in

the findings of research. Some initiatives have already been taken.

Indigenous people’s organizations around the world such as the Indigenous

Peoples Biodiversity Network are seeking guidelines for legal recognition of

their intellectual property. Thailand, the Philippines and Australian

aboriginal groups have all taken steps to protect indigenous knowledge.

 

Developing countries facing similar challenges can benefit from consultation

and cooperation to create model laws, collaborate in training public

officials and devise strategies to help industries adversely affected by the

new regime. Spreading awareness of the issues at stake is important in

building coalitions among national interest groups, regional organizations

and international civil society campaigns. Presenting counter-proposals as a

united negotiating bloc would greatly strengthen the possibility for change.

In March 1999 the International South Group Network drew together

representatives from 17 southern and East African countries to discuss a

joint position on the upcoming World Trade Organization round and the review

of the TRIPS agreement, greatly strengthening the clarity and force of the

message to be delivered from countries in the region.

 

The TRIPS agreement was drawn up with remarkably little analysis of its

expected economic impacts. The costs of implementation -- revising laws,

training officers, testing and enforcing patents -- are high, yet the

benefits are unclear. If the agreement is to be reviewed, then let it be a

review in everyone’s interests. A transparent cost review mechanism should

be established within the World Trade Organization, to track the costs of

implementing the TRIPS agreement, the effects on consumer prices, the cost

of anti-competitive effects and the impact on technology flows. And most

important, it should examine the impact on biodiversity, on farming

communities and on access to medical resources and scientific information.

 

PUTTING PRECAUTION BEFORE PROFITS

 

The potentially great benefits of the new biotechnology come with risks

attached: national and international guidelines are urgently needed as

transgenic crop production grows. Each country needs to draw up biosafety

measures, to monitor changes in biodiversity, demand transparency and

labelling of products, consider the social, economic and ethical impacts and

promote research into areas of national need. Regional coordination is

needed for sharing data and experience, for sharing in the costs of training

officials and for developing rules of trading.

 

Much greater attention must be given to understanding the potential

environmental and health hazards of genetically altered crops -- an

especially important task in countries where the science base and media

coverage are narrow and there is extensive fragmentation of the food chain

into many smallholders, processors and traders.

 

Participation in the process must be widened. Knowledge is needed not only

of the latest technologies but also of local ecosystems and food chains,

local culture and systems of exchange, socio-economic conditions and

political and market stability. This calls for broad collaboration. Some

countries are already on this path with established and representative

biotechnology advisory groups. France’s government has adopted the

precautionary principle, promising to survey the development of the genetic

revolution and increase public transparency on findings. The European

Parliament favours creating a registry of tested and accepted transgenic

products, making a database available to the public. Information and

communications technologies and biotechnology hold great potential for human

development. But strong policy action is needed nationally and

internationally to ensure that the new rules of globalization are framed to

turn the new technologies towards people’s needs. Thus questions need to be

asked on how it is used.

 

Does the control, direction and use of technology:

 

* Promote innovation and sharing of knowledge?

* Restore social balance or concentrate power in the hands of a few?

* Favour profits or precaution?

* Bring benefits for the many or profits for the few?

* Respect diverse systems of property ownership?

* Empower or disempower people?

* Make technology accessible to those who need it?

 

Global governance of technology must respect and encompass diverse needs and

cultures. Public investment -- through new funding -- is essential to

develop products and systems for poor people and countries. Precaution is

needed in exploring new applications, no matter how great their commercial

promise. Only then will the rules of globalization allow technological

breakthroughs to be steered to the needs of people, not just profits.

 

[BOX]

 

QUESTIONING THE OWNERSHIP OF KNOWLEDGE

 

Innovation is one of the most important processes for human development. It

pushes human capability forward and keeps cultures thriving. It is also at

the heart of the human quest to expand knowledge. But are patents always the

best way to promote innovation in new technologies? There are good reasons

to question this common claim.

 

- Experts question current trends -

Some scientists are appalled by the scramble for patents for commercial

gain, believing that it damages research openness about discoveries that

should be shared for the common good. With the “stacking” -- tactical

purchase -- of patents by corporations, the terrain of medical and

agricultural research is quickly being carved up and fenced off. Ideas are

no longer shared across the boundaries of different research groups.

 

- History tells another story -

Many of today’s developed countries -- ironically now the strongest

advocates of tighter intellectual property rights -- themselves had loose

rules when they were setting up their national industries, changing their

tune only after they became technology exporters. Canada and Italy had no

trouble attracting foreign investors even when they lacked patent

protection. In Switzerland in 1883, a leading textile manufacturer defended

loose laws, saying “Swiss industrial development was fostered by the absence

of patent protection. If [it] had been in effect, neither the textile

industry nor the machine-building industry . . . would have flourished as

they did.”

 

- Empirical evidence shows no clear link -

Despite the fierce defence of the need for intellectual property rights in

new technologies, there is no conclusive evidence to back it up. Do tighter

intellectual property rights increase trade in knowledge-intensive goods?

Unclear. A 1999 World Bank study examining the experience of more than 80

countries found that the effect of intellectual property rights on trade

flows in high-tech goods was insignificant. Do tighter intellectual property

rights increase foreign direct investment in high-tech goods? Studies say

yes for pharmaceuticals -- along with higher prices -- but for other

knowledge goods foreign direct investment usually depends on market size,

technological infrastructure and macroeconomic policy. Do tighter

intellectual property rights spur multinational corporations to carry out

in-country research and development? Apparently not: studies have found that

competitive markets are the biggest influence on research and development,

not patents. All this evidence is inconclusive -- but while the jury is

still out, how can the judge decide?

 

- There is living proof of successful alternatives -

Alternative ways of innovating are alive -- and doing very well. The

Internet is testament to the power of cooperative, decentralized approaches

to solving problems. Rejecting the tight control over software given by

copyright, a reverse movement has been launched -- “copyleft”, turning

standard practice on its head. Rather than guarding the source codes to

programmes, software developers allow users to view, modify and innovate

with them -- as long as they keep the new codes open too. The result?

Arguably the best software around. Apache, a Web server developed communally

by programmers in their spare time, is one of the most reliable and

up-to-date products available -- and is installed on 50% of publicly

accessible Web servers. Its no-secrets policy makes it an ideal tool for

teaching and experimenting in programming.

 

Source: Gerster 1998; Fink and Braga 1999; Leonard 1997; GRAIN 1998;

UNCTAD 1997.