International Trade in Technology - Licensing of Know-How and Trade Secrets
by Hans Verhulst

One of the effects of globalization is the relocation of production from the technology rich countries towards low labour cost countries. This is a threat for SME suppliers and manufacturers in technology-rich countries, whose customers turn their heads to low labour cost countries. On the other side of the globe, this trend creates opportunities for contract manufacturers and service industries.
From a historical and international perspective, we are witnessing a dramatic shift in the importance of the five main drivers for value adding: technology, production, marketing, logistics and support. From a historical and international perspective, technology -in the form of know how and trade secrets- has emerged as a key factor in this process.
In technology rich countries, there is a vast pool of know how waiting to be untapped. In emerging markets, there is an enormous demand for know how, waiting to be filled. This "trade in technology" could well be one of the answers to a changing world. But we need to improve the matching process for this trade i.e. through licensing. When it comes to transfer of know how and trade secrets which are hardly "patentable" -as is the case with most industrial know how- both parties, licensor and licensee alike, still seem to be reluctant to cross bridges. There is a role for institutions and governments to facilitate this matching process by improving the "climate" of intellectual property rights, particularly in know how and trade secrets.
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