In the EU, an estimated 23 million SMEs account for approximately 70% of EU jobs and GDP, and their flexibility is seen as a major motor of future innovation and job creation. SMEs represent 99% of all enterprises in the EU. They employ 65 million people, representing 56% of the European workforce.
The innovation and growth potential of European SMEs is pivotal for the prosperity of the EU as a whole and the Small Business Act, the Competitiveness and Innovation Framework Programme and the Europe 2020 strategy have reaffirmed the European Commission’s (EC) commitment to providing support for SMEs’ growth so as to ensure their continued contribution to Europe’s economic competitiveness.
Intellectual property rights, as an intangible asset, are a key factor in the competitiveness of European SMEs in the global economy. IP is a primary method for securing a return on investment in innovation and is particularly relevant to SMEs as they internationalise their business with third countries. IPR infringement is one of the most common concerns for businesses when dealing with ASEAN nations and its impact on European business is substantial, as confirmed by a recent DG TRADE survey (European Commission, DG TRADE, IPR Enforcement Report 2009) which observed that there are serious systemic problems regarding domestic enforcement of IPR in Indonesia, Philippines and Thailand; in Indonesia alone it is estimated that “92% of the video market is in the hands of pirates”. Significant gaps with regard to IP administration and enforcement also exist in Brunei Darussalam, Cambodia, Lao PDR and Myanmar.
IP rights infringement can lead to loss of business, revenue, reputation and competitive advantage, which affects SMEs both in ASEAN countries and in their core markets, and the inadequate protection of inventions and creations can jeopardise prospects for maintaining a competitive advantage.
ASEAN is now the EU’s fifth-largest trade partner, and more and more SMEs are starting to work with ASEAN through export, import, licensing or through involvement in global supply chains. In some cases, European SMEs that do not have any involvement with ASEAN or ASEAN markets have had their IP infringed, discovering counterfeits of their products and trade marks produced in the ASEAN region. It is therefore essential in today’s globalised business environment to have an awareness of IP systems in key emerging markets and manufacturing centres including those of ASEAN countries.
Complementing ASEAN’s emergence as a major trading partner is an increased focus on the development and harmonisation of IP systems across the ASEAN region. Within the region there are varying degrees of accession and compliance with international IP institutions and agreements such as World Intellectual Property Office (WIPO) Internet Treaty, Madrid Protocol, Hague Agreement concerning the International Deposit of Industrial Designs, Paris Convention for the Protection of Industrial Property, Berne Convention for the Protection of Literary and Artistic Works, Patent Cooperation Treaty, and the Budapest Treaty on the International Recognition of the Deposit of Microorganism for the Purposes of Patent Procedure. On-going developments to individual nations’ and cross-regional IP legislation will be reflected by updates to resources produced by the Helpdesk in order to give European SMEs the most accurate strategic advice for conducting business with ASEAN countries.
The ASEAN IPR SME Helpdesk
The Helpdesk is aware that SMEs are a heterogeneous group characterised by their different sizes, different industries, different level of engagement within different ASEAN nations and that they exhibit a different level of understanding and commitment to IP. SMEs frequently have no IP enforcement strategy and often fail to appreciate that prevention starts with IPR registration and protection due to financial and human resource constraints. These constraints limit their access to information and strategic advice, compared to multinational corporations, and lead to comparatively higher opportunity costs when investing in IPR protection. As a result, the impact of infringement is more serious, and more difficult to deal with for these under-protected companies.
The Helpdesk aims to meet the need for continued awareness among European SMEs of the possible risks of IP mismanagement in a challenging environment, and provide training and resources on the importance of implementing preventative strategies before entering the ASEAN markets, as well as first-line support for European SMEs that have experienced IP infringement in the ASEAN region.