Intellectual Property Development in Nigeria: An Investor s Perspective building a knowledge-based economy in Nigeria. by: Mr. Wale Edun Co-Founder, Alteq (ICT) Ltd. June
Contents The Backstory About Intellectual Property Investment Opportunities Required Interventions Summary & Conclusion 2
1 Executive Background The Executive Backstory Summary Executive Summary Summary 3
Nigeria s economy is becoming quite diversified and the services sector is now larger than the other sectors Source: National Bureau of Statistics Revised and Final GDP Rebasing Results by Output Approach 4
Despite the importance of innovation in a services dependent economy, our level of innovation is one of the lowest in the world.. A. Factors that drive Innovation include: Human Factor - knowledge, level of education, skills and creativity of the people, i.e. the intellectual capital of the people Technology - the culture of innovation and the systems and infrastructure to support innovation Capital - availability of financial resources particularly risk capital to support exploration, exploitation and commercialization of ideas Adequate training and education for entrepreneurs Motivation in schools, universities, businesses, civil society, and government B. There is a correlation between level of development/income level of a nation and its innovation ranking. All the top 25 economies in the ranking, except China and Malaysia, are high-income countries. African countries are the least ranked although there is an improvement in the latest ranking. 5 Source: www.globalinnovationindex.org (2014)
2 Executive Intellectual Executive Summary Executive Summary Property Summary 6
Intellectual Property (IP) is a strong measure of a nation s level of innovation, creativity and economic prosperity Intellectual Property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. (World Intellectual Property Organization (WIPO)) An inventor s IP is protected by going through a legal process to register the IP as one or more of the following depending on the country where it is being registered: Patent Trademark Industrial Design Copyright Utility Model Globally, the number of applications (or filings) for IP rights across the different classes is on the rise with applications for trademarks being the most popular accounting for 59.43% of all applications in 2013. The patent offices of China, USA, Japan, Republic of Korea and the European Patent Office received 79.9% of all patent applications in 2013. This special club of nations represents some of the world s largest economic superpowers. 7
Despite being the largest economy in Africa, Nigeria s IP stock is seriously lagging behind other low- and middle-income nations Patents - the number of applications for patents in Nigeria (919) in 2013. This figure is just 12.5% of the applications received in South Africa and 44.7% of those filed in Egypt. Trademarks - Although the applications for Trademarks in Nigeria in 2013 stood at 19,332 compared to South Africa s 36,070, this represented a year-on-year increase of 12.5% compared to South Africa s 4.2%. Industrial Designs - 953 applications for industrial designs were filed in Nigeria in 2013. This figure is just 18.8% of Morocco s 5061 applications and 42.6% of South Africa s 2237 applications. Nigeria 919 8
Despite the picture painted earlier, Nigeria presents several opportunities for exploration and exploitation it IP rights 3 Areas of Opportunities 9
ICT represents a major growth area to exploit IP, attract investments and exponentially grow the Nigerian economy 2012 1,000 orders/day $35MM Market Size EXAMPLE OF NIGERIA Connect Nigerians: the growing e-commerce ecosystem $100 average basket size Other Impact Job Creation 15,000 jobs created since 2012 Service Industry Expansion Infrastructure Warehousing Advertising Logistics 2014 - Federal Ministry of Communication Technology 2014 15,000 orders/day $100 average basket size $550MM Market Size POTENTIAL MARKET AND OPPORTUNITY 300,000+ orders/day $10BN Market Size $200M foreign investment in ecommerce To Date 10
Other Areas that present tremendous opportunities for investments through creative exploitation of IP include Agribusiness - development and transfer of technologies that address agricultural challenges unique to Africa such as parasitic weeds, bacterial attacks, susceptibility to drought and disease, low productivity, sub-optimal yield, etc. Entertainment and Media - production and distribution of films, TV programs, music, webisodes, advertising contents, locally relevant digital contents, etc. Examples include Nollywood films and Nigerian Music. Licensing these contents to local and international networks and media houses will bring additional revenues to the owners of the contents. Textiles and Accessories - design and production of Nigeria-made fabrics such as adire. There are opportunities to create more designs for other fabrics such as Ankara, Lace, Satin, Apoche and Aso Oke. The design of fashion accessories such as ear rings, bangles, etc. from local materials also make for additional IP sources. Fashion Design - designs of styles unique to Nigerian culture using Nigerian-made fabrics. All the fashion designs exhibited at local and international fashion shows as well as local ceremonies will make for a great collection of IP assets that can be commercialized and licensed by the designers. 11
Other Areas that present tremendous opportunities for investments through creative exploitation of IP include Furniture and Household Goods - design and production of furniture especially those made with local materials. The banning of importation of certain categories of furniture provides unique windows to create locally designed household goods with IP that can be protected and later exploited for commercial benefits. Visual Artwork - creation, mass production and preservation of pieces of artwork such as paintings, sculptures, etc. Through a proper IP registration and search information system, replicas of these artworks can be made and sold thereby generating revenues for the owners of the works especially for the export market. Research and Development Work in Academic Institutions - as the host of Africa s largest concentration of Universities and some of the continent s oldest Universities, Nigeria has the potential to be the engine room for IP especially patents for creation of goods, services and new markets, books and other publications, trademarks ready for exploitation by Industry, etc. 12
4 Required Interventions 13
However, these opportunities will remain largely unattractive to investors if the following interventions are not implemented. Infrastructure for management of IP rights - the institutions (i.e. Ministry of Industry, Trade and Investment and Nigerian Copyright Commission (NCC)) responsible for IP management must be adequately equipped with the knowledge, skills and tools to perform their statutory functions. Development and Implementation of IP Action Plan - there is need to develop an IP action plan that reflects the global reality and local opportunities. The action plan must be aligned with the national economic development plan aimed at diversifying the economy. Funding and execution of this plan must be given very high priority. Strengthen existing laws and ensure stricter enforcement of IP laws - there must be more seriousness in enacting laws reflect today s technological advancements and deter piracy and other IP abuses. The security agencies must see IP as national economic assets that must be protected and all those guilty of infringement must be prosecuted to the full extent of the law. Research and Development Work in Academic Institutions - many institutions structured and equipped to exploit IP from academia and serving as a bridge between Academia and Industry must be setup and run. Incubators to groom young businesses must be given priority, resourced and encouraged. Private sector must be given incentives to invest in innovation, research and development and in setting up IP exploration and exploitation programs. Enlightenment, Training and Education of Stakeholders - the general public must be fully enlightened on the importance of complying with IP laws. The inventors and creators must be educated and trained on how best to create and exploit their intellectual capital. Government staff responsible for regulation and enforcement must also be adequately trained on relevant IP issues in line with their colleagues in other countries.. 14
5 Summary & Conclusion 15
Conclusion The correlation between level of innovation and economic prosperity means that any plan to diversify Nigeria s economy without including a Science, Technology and Innovation Plan is an exercise in Futility. To create an environment conducive to innovation and creativity, there is need to put in place and constantly improve IP system and infrastructure that facilitates creativity and ensures adequate reward for owners of the IP. To boost investor confidence in Nigeria s economy particularly in the areas of Science and Technology, Information and Communication Technology (Software and Apps), Agriculture, Entertainment and Media, Fashion, Textiles and Accessories, and Visual Arts, enforcement of IP and Copyright protection must be given priority by government and security agencies. Private Sector needs to leverage its vast experience to partner with government to tackle the challenges of piracy, lack of proper commercialization models, absence of infrastructure and systems to ease IP management, insufficient training and education programs for entrepreneurs and policy makers, etc. 16
17 Thank You