Xiaobai,S . "A dilemma for developing countries in intellectual property strategy? Lessons from a case study of software piracy and Microsoft in China" Science & public policy [0302-3427] 32.3 (2005). 187-198.

 

    This article poses two important questions; Will businesses and countries invest in the economies of developing countries if these developing countries do not enforce intellectual property rights on the same standards of developed countries?  And, if the current situation of increasing the strength of intellectual property rights in developing countries continues, will these developing countries be able to compete in a world of IPR harmonization?
    The article poses an initial answer to these questions by citing empirical studies that suggest developing countries develop best with weak IPR regimes and that only as these countries become more developed should they enforce stricter regimes.  Examples of countries that have enacted stronger IPR regimes as their economies developed are East Asian counties including Korea, Japan, and Taiwan, and notably the United States.  Yet, what the empirical evidence lacks, according to this article, is a timetable for deciding when a country is developed enough to implement a strong IPR regime.  To understand the situation further, the article turns to a study of Microsoft software in China.
    In this study, the article first gives an overview explaining how prevalent piracy is in China.  The article then shows that despite this piracy, Microsoft has entered the Chinese market with great difficulties.  Piracy of Microsoft products subsequently increased and contrary to logic, this led Microsoft to further invest in China in an attempt to promote legal usage of Microsoft products.  This further investment was presumably because Microsoft sees China as the largest potential market in the world.
    This study then shows that, contrary to some scholars’ beliefs, a weak IPR regime can lead to an increased investment in developing countries.  However, this is counterbalanced by the belief that an investment of high-tech products does not allow the developing country to discover its own technologies/products/ideas.
    This article, although slightly redundant with other sources, is crucial to backing the project's thesis that developing countries and especially China are best advised to take a gradual approach to implementing strong IPR regimes.  The article also fully supports the argument that China is best suited to a gradual increase in its IPR protection in that the article presents a case study showing that foreign investment in China will still occur despite its weaker IPR protection than developed nations.