[New Wave] The Key to Innovative Growth in the 'Endemic' Era

The pandemic is reaching its peak, but the real crisis has not yet begun. There are signs of prolonged economic slowdowns not only in emerging countries including China but also in major economies of the US and Europe. Lawrence Summers identified the cause of the US recession as a ‘structural shortage’ of aggregate demand and raised the theory of long-term stagnation. How should we respond to the crisis in the endemic era?

The pandemic has accelerated automation and digital transformation, reducing jobs, and carbon neutrality will trigger a chain reaction including rising raw material prices, increased corporate burdens, and inflation. In South Korea, where the birthrate is the lowest and aging is fastest, the elderly are tightening their wallets in preparation for the 100-year life era. The Korean economy is changing into a structure that demands active government intervention such as increased fiscal input, strengthening social safety nets, and promoting investment.

President-elect Yoon Seok-yeol’s innovation growth policies include digital platform government, aerospace, climate crisis, environment-social-governance (ESG), media and content, and smart manufacturing. However, one thing we tend to overlook in innovation growth is ‘intellectual property.’

Leaders of advanced countries that have dominated the global economy and held hegemony always emphasize intellectual property. This is because intellectual property is used as a key to growth strategies of hegemonic countries. The steam engine, the engine of the Industrial Revolution, was first developed in France but flourished in the UK where James Watt was granted the patent. Patents, trademarks, copyrights, and trade secrets are either new technologies, services, creative content themselves, or their core.

In 2008, the US established the Intellectual Property Enforcement Coordinator (IPEC) in the White House to strengthen coordination functions, and recently has been pushing for the establishment of an independent central administrative agency that integrates and manages industrial property rights and copyrights. Given that innovative technology is at the center of the US-China hegemony competition, President Joe Biden and President Xi Jinping also treat intellectual property as a top priority. The starting point of the current hegemony dispute with China was intellectual property rights infringement. In Japan, Prime Minister Fumio Kishida is focusing on the ‘Economic Security Strategy’ and is promoting the ‘Economic Security Promotion Bill’ that uses intellectual property as a strategic tool.

Intellectual property cannot exist separately from industrial policy as it is inseparable from innovative industries. We have treated science and technology, creation, industry, business, and intellectual property separately, so policy effects have not been properly realized. From the metaverse, which the MZ generation (Millennials + Generation Z) is enthusiastic about, to unmanned reconnaissance drones, smartphones, and detailed paintings that show the pinnacle of art with thousands of brushstrokes, the fusion of culture, art, and technology has become a zeitgeist, but we are still talking about fusion within an immature system.

To successfully prepare for the endemic era, the recognition and active support of intellectual property by leaders fitting South Korea’s status as the world’s 5th most innovative country are necessary. Paul Romer, a Nobel laureate in economics, presented people, ideas, and materials as the three major factors of new production and mentioned technological innovation and intellectual property rights systems as the foundation for economic growth. Intellectual property, the fundamental strength of the national economy, will help overcome the current crisis and lead the expansion of South Korea’s technological and cultural territory.

Son Seung-woo, President of the Korea Intellectual Property Research Institute

This content was produced with the assistance of AI translation services.