China makes computers, but imports most of its chips. India makes drugs, but copies almost all of the compounds; it writes software, but rarely owns the result. The bolder claims made for all three industries thus have a similar, hollow ring. They have flourished, but mostly on the back of other countries' technology. “We are not at the stage of Intel Inside,” admits Arvind Atignal of Clinigene, a clinical-research firm, drawing his own analogy between desktops and drugs. “We are the keyboard, screens and peripherals.” 0j7\.a
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How much does this matter? Joseph Xie of SMIC, the Chinese chipmaker, spent seven years working inside Intel. Its strategy, he says, was simple: “get there first; make most of the money; let the second guy get the change.” That is certainly one way to run a technology firm. But competing in that race is expensive and exhausting. Few of Intel's rivals still try to keep up with it, nanometre by nanometre. R BwI*~%g{
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Countries of China's and India's heft and ambition cherish the idea of pushing back the limits of technology. But that push is risky, costly, frustrating work. A country shouldn't do it unless it has to. Although China and India could devote their considerable intellectual resources to solving the problems faced by economies on the technological frontier, why cross that bridge until you reach it? Seen in this light, India's generic drugmakers are models not laggards. They invest in just enough know-how to exploit the rest of the world's discoveries. Thanks to them, Indians enjoy some of the world's cheapest medicines. vM1f
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Under the WTO's Trade-Related Intellectual Property Rights agreement (TRIPS), India has ceded the right to free-ride foreign advances. It now grants 20 years of patent protection to inventions hatched after 1995. In return, it hopes tighter laws will inspire Indians to new exploits in innovation, and reassure foreigners wary of inventing or making original products in the country. m+"?;
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The tougher laws may yet succeed. A recent study by Bruce Abramson of the World Bank expresses high hopes. A “patent chic” is already detectable in the country, he reports. He has even heard of Indian farmers calling lawyers in the hope of patenting their prize vegetables. M{3He)&
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But, as yet, the new regime has not proved its worth. Over 17,000 patent applications were filed in India in 2004-05, almost 40% more than the year before. But only 3,500 were by Indians. Of the 49 most prolific filers in the past decade, 44 are either foreign companies or subsidiaries. Of the five Indian firms, all are either government-sponsored institutes or generic-drug companies, which did fine before TRIPS. UOy`N~\gh+
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The new regime will be costly to run, if India takes it seriously. But the larger cost lies in the opportunities for unabashed imitation that India has now forgone. These lost opportunities might be quite big. Had Indian firms been prevented from copying fluoroquinolones, for example, the Indian public would have been worse off by the equivalent of $255m a year, reckons a study of the antibiotics market by Shubham Chaudhuri of the World Bank, Pinelopi Goldberg of Yale and Panle Jia of the Massachusetts Institute of Technology. |94"bDL3~
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