Intellectual Property for Economic Development

Intellectual Property for Economic Development

KDI series in Economic Policy and Development

Edited by Sanghoon Ahn, Bronwyn H. Hall and Keun Lee

Protection of intellectual property rights (IPRs) serves a dual role in economic development. While it promotes innovation by providing legal protection of inventions, it may retard catch-up and learning by restricting the diffusion of innovations. Does stronger IPR protection in a developing country encourage technology development in or technology transfer to that country? This book aims to address the issue, covering diverse forms of IPRs, diverse actors in innovation, and diverse cases from Asia and Latin America.

Chapter 10: Mexico: auto industry and patenting in a technological dependent economy

Clemente Ruiz Durán

Subjects: economics and finance, development economics, intellectual property, law and economics, innovation and technology, intellectual property

Extract

Mexico has become the eighth auto producer of the world; its top production was reached in 2012 with 3 million units, and is expected to continue growing surpassing other emerging economies. Auto industry has been at the core of the manufacturing modernization of the country in the last twenty years, relying on the investment and technology of foreign producers. In a previous paper (Ruiz 2009) we argued that transnational corporations (TNCs) have been an important means through which local producers have gained access to new technologies and management know-how. Strong business linkages between TNCs and local producers can generate a relationship of trust, alliance, cooperation, knowledge, technical knowledge, and skills. Local producers have gone through a learning process, in particular through supplier development in the auto industry. This process has been one of the most challenging tasks for Mexico, which has attained a semi-integrated auto industry with a large network of auto parts suppliers. Development has gone through different stages. In the period from the 1950s until the 1980s, capacities were developed in assembling; after the North American Free Trade Agreement (NAFTA) entered into effect, investment moved from assembly plants to auto parts production, in order to build up the second and third tier suppliers network required to produce a solid procurement process in Mexico.

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