Japanese patent website, and African sites

The Japanese patent website can be found here. After the PAJ link is clicked, people can search for Japanese designs in whatever object interests them. I have been highlighting waterproof construction designs because of an emerging market in the Great Lakes region, and listed links to US and EU designs for waterproof tents in recent posts.

I looked at the Kenyan patent office website, the South African patent office website, and a pan-African body (here). None appeared to put designs online free of charge (I didn't look really thoroughly so may be mistaken), although it might be possible to get them for a fee from the South African website.

What might be helpful for economic development is free public online information for pan-African patents. If countries are concerned that public information combined with weak property rights would be a discouragement to innovation in their countries, then they could restrict the patents to those which are expired or aging (say three years old or more) or those where the patent holder is willing to allow public disclosure (which would admittedly probably be less commercially valuable).

Easy access to African specific patents could allow local innovators to build on knowledge which is specific to African circumstances. Inventions from developed countries may require considerable reengineering to work in African circumstances (for example, waterproof designs for a North European summer may not be robust enough in a tropical storm). There is also a demonstration effect - if a design has been shown to work in an African country, then entrepreneurs may be more willing to risk investment in it than if it had only worked on the other side of the world. Inventors working even with highly generic products in highly similar developed countries often build on local innovation more than foreign innovation, and choose to adapt foreign technology further for local circumstances. A pan-African database would mean that not every entrepreneur has to incur the same possibly elavated costs of adaptation from developed to local contexts.

Comparing the growth effects of openness

Openness (equal to a country's imports plus exports, all divided by GDP) is often included in growth regressions. Other determinant variables may describe internal features of the economy, such as the saving rate, education, institutional quality, and political stability. Sometimes the determinant variables may include foreign direct investment and other measures of external exposure, but by no means always.

External exposure brings some disadvantages and some advantages for a country. The advantages include more optimal allocation of global short-term resources (but usually only short-term, not long-term, as a country may get stuck in producing cash crops, for example, rather than industrialising), and international technology transfers. By technology transfer, I mean use in production of information about methods or input combinations, where the information has been taken from abroad. Estimates on the growth importance of transfer vary, from quite important to really important (explaining over half of growth in some countries).

Openness is only one possible way of getting technology from overseas. Foreign direct investment, licensing, joint ventures, student and teacher movement, expatriate return, seminars and the internet are all possible sources of information about it, and may be more effective. Moreover, studies indicate that imports may be more effective for transferring technology than exports, and capital goods imports may be better than consumer goods imports. So having openness as the measure of external exposure will capture the (perhaps dominant form of) external influence on growth only partially and with considerable error.

The other variables in the regressions will pick up the effect of international exposure if they are correlated with the exposure, and correlation will often occur if people and companies in the economy try to maximise their income at all, since people are likely to adapt to encourage transfer if they think it is advantageous. So the effect of, for example, education or institutional form will be overestimated. Misspecification or incomplete specification increases the chance of interpretational error in estimations where internal factors seem to matter much more than external relations. On theoretical grounds, we may question this outcome, as it does not seem believable that so many countries are suddenly getting their internal arrangements far better than almost every other country in history, as measured by their economic growth.

Hunger map

I came across an interactive map on the UN Food and Agricultural Organization website, here. It shows global rates of hunger by country since 1970. In 1970, countries in Northern Africa were hungriest. Today, countries in Southern Africa are hungriest. The highest rates of hunger are correlated with wars.

Emerging Great Lakes market for waterproof structures and related equipment

Demobilisation and repatriation continues apace in the Great Lakes region, as reported on the IRIN UN news website here. There are obvious requirements for materials and homes for the people involved, as well as for internally displaced people who often live in poor quality housing. Here is a report describing shortages among individuals and organisations.

It looks like an opportunity for an entrepreneur to seize the market. Labour will be in abundance and therefore cheap (albeit requiring training), and there may be a short term burst of economic growth that often follows the end of conflict. Profits could be higher still during the period as they are residuals equalling income minus costs (profits were found to be very high even during the Burundian conflict in a UNIDO report, for those companies that survived). Recent trade agreements open up economies throughout the region. For an entrepreneur able to undercut international prices (and the cost of getting heavy equipment to the region is not trivial), they could capture much of the market.

Potential entrepreneurs may wish to familiarise themselves with the designs of their leading international competitors here, here, and here (searches for waterproof tents - searching gives designs for other equipment).

Is growth due to productivity improvement or factor accumulation?

There is an empirical debate whether developing country growth is mainly caused by productivity improvement or factor accumululation. Some of the evidence, theory, and opinions are given in the document here (for example in Table 1 on page 8).

Here is a small theoretical argument why the contributions of both are likely to be of comparable magnitude. It is not complicated but I haven't seen it from anyone else. Suppose output = A.K where A is productivity and K is capital (possibly aggregated across physical and human and other capitals), and A + a.K = b is a budget constraint where a and b are constants. Suppose also that capital suppliers and productivity suppliers are paid roughly the amount they contribute to growth. Then a equals one since A and K are symmetric in the production function so A and K must cost the same. Then output = A.(b - A), and maximising gives A = b/2 (= K). Taking differences over time, the growth contributions of productivity growth and factor accumulation should be the same.

The argument works if the country pays for their productivity improvements. But even if they don't (in the absence of IPRs for example), the costs of technology transfer can be considerable (a famous estimate from the 1970s due to Teece is over half the cost of innovating in the first place if I recall correctly). So even in this case, the costs are comparable to those of renting, and the contribution of productivity improvements will not be far higher.

Pandemic influenza threat

There have been outbreaks of influenza in Mexico, followed by occurrences of the same form of the disease in the United States and reported cases in New Zealand and the United Kingdom. The World Health Organization has been reporting on the possible early stages of a pandemic here.

Does information freedom matter for growth?

In theory, information freedom should be important for growth. If someone wants to take advantage of the best available opportunities in a market, they have to know about them before they mobilise resources. Transparency in government procedures should also encourage investment.

I ran some quick tests on whether information freedom matters in the form of press freedom. I graphed average annual gdp per capita growth in the period 1994-9 against the Reporters Without Borders press freedom index for countries in 2008 (available here). The mismatch in dates weakens the causal links from the index to growth - I assumed that the current index is highly correlated with the index in the past. The mismatch was accepted in order to maximise the available data points. I could put in many cautions about my use of the RSF index, but won't for brevity.

Here is the graph for African countries, with a trend line:



and here is the one for world countries:



It looks like more press freedom is associated with increased growth. There might be causality in either direction. The weak is link, but that is often the outcome of quick correlations between growth and its determinants. For example, here is the African growth-savings graph from 1994-9:



and here is the world graph:



Stronger links tend to be hidden in the data and require digging to show them.