Thursday, 29 January 2015

Counterfeiting, a sword with many edges.

There's a report on the Rwandan New Times newspaper that manufacturers have been urged to fight counterfeit goods, which threaten locally produced goods.  I'd be surprised if the net benefit of counterfeiting and piracy for Rwanda is not positive, as it's consumers can buy foreign branded goods at cheaper prices.  Nevertheless, local manufacturers may want to protect locally produced goods while having no protection for foreign produced goods.  The stance is inconsistent, but inconsistency may benefit development, so long as foreign countries don't retaliate.

Less well known are the opportunities presented by illegal copying.  If a good is not well known, then a small, controlled amount of piracy can help a manufacturer to advertise the good.  Similarly, if market share is important, or if the good gets better if everyone has one (like a communication device, or something based on popularity), then piracy can help to increase profits.  It depends on the market, but is worth considering.

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