Intellectual property has become increasingly important for the development of countries’ economies. The proper management, protection and defense of copyright and industrial property are now key to the growth of businesses and the economy in general. Mexico has a strong legal framework in this area and in recent years it has made significant progress in making it even more effective and competitive.

In today’s world, in which non-stop technological progress has made information available to all, competitiveness essentially rests on two pillars: the creation of intellectual capital and the ability to innovate.

Innovation is not only needed by companies seeking to break into international markets, but it also constitutes countries’ main source of wealth-generation.

This has been highlighted in studies by institutions such as the Organisation for Economic Co-operation and Development (OECD), which have shown that science and technology generate 25% of economic growth in developing countries and at least 50% in developed ones.

In this field, Mexico has the opportunity to promote innovation to gain competitive advantages in respect to other markets, especially if one considers that there is up to 60% return on investments in research and development in the country, a higher rate than in other OECD member countries (which do not exceed 40%).

The role of intellectual property
The link between innovation and intellectual property rights as a source of wealth generation is closer than might first appear. According to Professor Eusebi Nomen, director of the Chair of Intangible Assets Analysis at ESADE (Escuela Superior de Administración y Dirección de Empresas) in Barcelona and an expert in the subject, “the most important type of innovation for companies, as well as for countries’ Gross Domestic Product (GDP), is protectable innovation,” as it drives forward business productivity and creates jobs, both of which are vital means of attracting foreign capital. Some studies show that between 2002 and 2005, Mexico’s innovative companies saw a job-creation rate of 38% compared to 27% of non-innovative companies. On the other side of the equation, “nonprotectable innovation creates a shift in the cost-efficiency curve, and there will be less return on investment.”

This is where intellectual property comes in. A proper system of intellectual property rights (IPR) is key for the creation and management of protectable innovation. Who would want to invest in promoting the development of biotechnology in a country with weak patent protection? What kind of company would be willing to introduce its brand, –with all the costs involved– into a market without efficient mechanisms to combat falsification?

There is clearly a close relation between an effective intellectual property system and the economic development/growth of a country. According to the Intellectual Property Rights Index 2010, a comparative international study that measures the importance of IPR for economic health, countries with strong and consolidated intellectual property protection systems such as Finland, France, Sweden, the UK and the US register a higher GDP and attract more foreign direct investment. Meanwhile, countries with lower GDPs have a weaker or non-existent IPR system.

Mexico has a strong legal framework to protect intellectual property rights and is currently working to make it even more effective. In recent years, the federal government and various federal departments have intensified their efforts to improve the protection of these rights, strengthening inter-governmental coordination and international cooperation to combat piracy and falsification of various products.

Similarly, the Mexican government is working with national and foreign private sector organizations, such as the American Chamber of Commerce, to take short-term measures and promote the necessary legal reforms to improve the defense and protection of IPR.

Mexico is therefore cementing its position as a competitive destination for foreign investment, with effective and swiftacting legislation to give confidence and certainty to investors.