Chamber Of Commerce Gets Basic Stats Backwards, Calls For Stronger US Patent Protection For No Good Reason
from the oops dept
David Levine points us to an analysis by Kevin Smith (not the movie maker) at Duke University of a recent report from the World Economic Forum, placing the US as 19th in how strong our intellectual property laws are. This report caused the US Chamber of Commerce to say it’s evidence that the US needs stronger IP laws. Yet, Smith points out how silly this analysis is. First, being 19th out of 133 is already pretty damn near the top of the list. Second, the way the WEF ranked the strength of IP systems was based entirely on “executive perceptions” of IP laws in certain countries — hardly a definitive measure. But, most important, the report shows nothing of the actual impact on innovation. So, Smith did a quick back-of-the-envelope look, and noticed something interesting:
I started with this list of countries based on economic growth (the growth rate of the Gross Domestic Product) using data from the CIA World Fact Book. The US is 67th in GDP growth rate, and I made a list of ten countries from the G-20 group of nations with higher growth rates than that of the US and compared that list of ten countries to the rankings of perceived strength of IP protection. All ten of these countries, it turns out, are perceived to have weaker IP protection than the US. To choose an obvious example, China has the fastest economic growth rate of any of the G-20 economies, but is ranked far below the US — at 61st — on the list of strong IP protectors.
It is easy to lie with statistics, of course, but this simple comparison suggests that weaker IP protections might actually correlate with economic growth….
This is not surprising, and has been supported by plenty of studies in the past. Eric Schiff’s famous look at how the Netherlands and Switzerland had massive growth rates during a time without patents (or with very weak ones) is instructive here, but there are numerous other studies as well. It’s quite clear that stronger patent law does not mean greater innovation or economic growth… and yet why would the US Chamber of Commerce falsely interpret the study that way? The most basic theory? Patents have never been about innovation or economic growth. They’ve always been about protecting incumbents against competition. Guess who are members of the US Chamber of Commerce? Yup… the incumbent business owners…
Filed Under: innovation, patents
Companies: chamber of commerce
Comments on “Chamber Of Commerce Gets Basic Stats Backwards, Calls For Stronger US Patent Protection For No Good Reason”
Bubble Charts
Somebody could gather that information(I don’t know where to look for) and put it in a google doc with a bubble chart showing all the correlations that exist.
It can even be done in group as the documents can be updated by anyone if it is configured that way.
Those bubbles charts appeared in the TED Talk and was bought or licensed to google. They are amazing on what they can show.
If you’re going to post a story like this, why not go to the relevant data and perform some sort of actual computation?
Re: Re:
Or, ya know, like link to the web-page being referenced in this article!
No, wait, there it is.
THIS LINK IS FOR COWARDS WHO DON’T KNOW HOW TO CLICK LINKS
Hans Rosling
TED talks Hans Rosling
Hans Rosling GapMinder
Hum… I don’t want to rain on your parade Mike, but there is here clearly a case of multi-correlation that is not taken into account.
Countries with smaller GDP per capita often have higher rates of growth (for a variety of macroeconomic reasons which have little to do with IP) and they often have weaker IP laws. (because a lesser portion of their economy uses IP) Smith’s number crunching does not actually imply that weaker IP laws lead to greater growth.
Now, I do tend to believe that IP is often a speed bump for innovation, but it is harmful to your credibility when you copy paste that kind of math without a stronger disclaimer. And it’s not as though those of us who feel as you do about IP really need to give the industry another stick to beat us with.
Re: Re:
In this case, the Techdirt argument is not that there is obvious, causal, and conclusive correlation between weaker IP protection and higher innovation. The argument is the that there is NOT correlation between higher IP protections and higher innovation, thus the Chamber of Commerce is arguing against the tide of empirical data. For better reading comprehension, focus on the words:
“It’s quite clear that stronger patent law does not mean greater innovation or economic growth”
Does Mike promote the Smith argument as highly accurate statistical analysis with no chance of multi-correlation? No, once again, focus on the words:
[Smith took a] “quick back-of-the-envelope look”.
To make the nuance more clear, think of it as: The Chamber said the Earth was flat. Mike/Smith did not set out to prove the earth is round, but they did a decent job of showing that it isn’t flat. You then chastise Mike for failing to prove conclusively that it is round.
What you wrote regarding the reliability of the Smith analysis is largely correct, but you fail to appreciate what Mike wrote.
Pirate Countries
It seems like using tin-pot little outlaw countries that grow fat on the lifeblood sucked out of illegitimate business models to justify committing the same sort of immoral acts here is all the rage nowadays. Would the great Glenn Beck condone such a state of affairs?
stop the shilling!!!
“All ten of these countries, it turns out, are perceived to have weaker IP protection than the US.”
Interesting, but not conclusive and not necessarily relevant.
Why is it none of these people ever poll the parties who rely most on patents -inventors. Do they really want to know the truth? No.
Thinking Like A Shill
Of course, the shills out there will simply say that the countries that have weaker IP protection are actually benefiting economically from stuff that they shouldn’t be benefiting from.
Like, “China is stealing US tech and selling them as their own, to the detriment of the US inventors and the economy.”
Baloney.
Strong Patents
Strong patents help the small inventors since the big companies have the money to control the market without patents. Big companies can also attack patents with their money if the patents are weakened in any way. Strong patents also give VC money the courage to invest in the new tech.