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This article considers the impact of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in developing countries. After an initial phase of “paper compliance” with TRIPS, followed by efforts to manage the welfare costs of its implementation, a number of developing countries are looking at ways to optimize the implementation or reimplementation of the agreement to foster domestic competitiveness and innovation. One part of the equation involves attracting technology-intensive foreign direct investment. Another involves enhancing local innovation potential. Surfing the wave of outsourcing, which increasingly targets higher knowledge functions, a number of developing countries are becoming globally competitive innovators and displacing the geographical centres of innovation, with substantial political and economic impacts.
