Francis Gurry on the rise of protectionism

Liam Tung

World Intellectual Property Organisation director general Francis Gurry reckons the world is facing a rise in country-level threats to open innovation in science and technology that has the potential to do serious harm to the world’s economies.

Mr Gurry, an Australian who has led WIPO since 2008, expressed grave concerns for the world’s future as a result of the rise of China, the demise of international cooperation, and the trend toward countries seeking to protect security and intellectual property by closing economies and returning to trade protectionism.

WIPO, an agency of the United Nations, is the world’s forum for intellectual property (IP) services and policy, is placed to observe shifts in the global sharing of IP, innovation, and trade.

Francis Gurry
Francis Gurry: An Australian in the wheelhouse of the World Intellectual Property Organisation

Mr Gurry spoke recently at a forum hosted by the Australian Society for Computers and Law about how WIPO is seeing technology and competition affect multilateralism, at a time when the US and Europe impose more stringent rules for foreign direct investment. Additionally, he considered what impact the COVID-19 pandemic has had on international cooperation.

“I think that technology has become the main basis of both economic and geopolitical competition,” Mr Gurry said.

“We see it on the geopolitical level in that science, technology and innovation are a really central element of the strategy of major countries around the world — the United States, China, Japan, Germany and you go on down the list.”

The COVID-19 pandemic was merely an “accelerator” for pre-existing trends towards the decoupling of economies as seen in the trade war between the US under President Donald Trump and China under President Xi Jinping. This is playing out through companies like Huawei, ZTE, Google and Apple, and of course in the restrictions on equipment deployed in 5G networks in the West.

Things that have accelerated as a result of COVID-19 include remote working, and the tendency to use less physical cash to pay for goods, while nationalism has found a new expression in “vaccine nationalism”, he said.

“You have a lot of signs of closure in this world,” Mr Gurry said, noting the “conjunction” that governments are placing between economies and security is acting as “an agent of closure.”

Meanwhile, multilateralism has not been well supported by institutions like the United Nations, which were built for a world that existed 70 years ago.

“The very idea of international cooperation is under threat,” he said. “Nobody is listening to the UN, let’s face it.”

On top of all this, governments around the world are dismantling global value chains, partly because political leaders’ believe that self-reliance is the way forward today, but also because technology has enabled newer methods of production that reduce the need for cheap labour.

“Adidas, like many companies, used low-cost labour manufacturing centres, such as Indonesia and Vietnam, but with technology from Germany. Now they are manufactured in Munich as a consequence of advanced manufacturing and artificial intelligence.

“What do you do about the labor cost? You can eliminate it with technology and that is one of the reasons for a change we are seeing global value chains,” he said.

Both State-sponsored and criminal cyber attackers have reshaped the world and the willingness of countries, depending on geopolitical alliances, to share threat information with each other.

He points out that Internet-era technologies are interchangeable enough that both class of attackers can use the same technology for different objectives – be it disrupting entire economies or critical infrastructure, conducting extortion through ransomware, or pilfering COVID-19 vaccine research.

The UK’s National Security Cyber Centre, with its peers in the US and Canada, in July accused Russia intelligence services of hacking pharmaceutical companies in Great Britain in search of a COVID-19 vaccine.

But Mr Gurry points out incidents like these are having a wider impact the development of knowledge internationally through new policies at universities regarding foreign students and academics.

“That’s received publicity in the United Kingdom and I think the restrictions being put in place by certain countries with respect to universities and the connections universities may have — the review of student visas, the review of short term visas — are all part of the conjunction of the economy and a contribution to closure in this world.”

On the other hand, he points out that the connection between military and technology is nothing new. Yet it is having a different impact on knowledge sharing.

“The connection between the military and technology is as old as technology, ranging from Leonardo Da Vinci’s letter to the duke of Milan saying, ‘Look I can build you catapults, all sorts of military devices’, right down to the origins of Silicon Valley,” said Mr Gurry.

While employees at Google, Microsoft and Amazon have protested the application of artificial intelligence for military or surveillance purposes, the US military’s technology demands have helped create some of Silicon Valley’s early tech giants, he points out.

“The integrated circuit, the Internet, networking technology more generally, the transistor and semiconductors all came out of military projects and many of the major players in earlier Silicon Valley, including Bell Laboratories, Texas Interments, IBM and so on,” he said.

“This connection between security, military and technology is as old as humanity. What you have however is something new in the current situation. When you look back at the cold war, it was really about military rivalry.”

“The Soviet Union was no economic competitor of the United States, which was the dominant economy in the post-WWII period. But it was a military-security competition … the economy wasn’t there. China is a $13 trillion economy, the second largest in the world. It’s an economic and military competitor, so that’s a different scene and another reason why we’re getting a conjunction of the economy and security.”

The other big shift in intellectual property is the rise of China and the gradual erosion of the US’ dominance in science and technology, at least in terms of patents and research and development.

The world collectively spends about 2.1 per cent of global gross domestic product (GDP) on research and development. In 2018, the US, the biggest player, spent USD$581 billion, which equated to about 42 per cent of Australia’s GDP.

“It’s an extraordinary sum. China in 2108 was spending USD$534 billion on research and development, about 37 per cent of the Australian GDP,” he said.

But the US today is not the clear leader it was during the Cold War. In 1960 the US accounted for 69 per cent of global research and development, but by 2018 its share had dropped to 28 per cent.

This marks an “extraordinary shift” on historical trends in countries that dominated science and technology and has changed more rapidly than any period since the European Middle ages.

“Around about the Renaissance, you could say that Europe dominated science and technology production for many centuries,” Mr Gurry said.

These days, Asia and in particular China are emerging as the next century’s leaders in innovation.

“The result is you have multi-polar competition. It’s not the world that has prevailed for the last several centuries where you had just Europe and North America. You’ve got Japan, China and Asia more generally. This is going to influence everything. It’s a major factor,” he said.

Do you know more? Contact James Riley via Email.

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