1. Asia-Pacific Finance and Development Centre 2006 Biennial Forum Shanghai, September 2006 Session V: Regional Cooperation and Innovation Development Presented by Ken Waller Senior Advisor Australia ABAC Secretariat

2. Agenda Cooperation in APEC – Innovation and Development Financial Markets – Supporting Innovation Technology in Finance and Innovation The Challenge of IPR APEC and ABAC – Roles and Objectives Capacity Building – Critical Pillar Summary 1

3. 1. Cooperation in APEC Innovation and Development 21 economies – diverse; high to low income economies Voluntary and non-binding Capital rich and highly innovative societies and poor communities Differences promote opportunities for cooperation Development and growth – the cooperative challenge 2

4. 1.1 Cooperation in APEC Innovation and development Key objectives of cooperation –Economic growth and higher living standards –Strengthening economic frameworks and financial systems –Promoting standards, IPR, innovative and emerging technologies –Developing regional responsiveness to natural disasters; pandemics; terrorism 3

5. 1.2 Cooperation in APEC Innovation and development APEC Leaders commit to –Strengthening IPR protection and enforcement –Adopting anti-counterfeiting and anti-piracy initiative –Sharing of technologies ABAC (Business) promotes information and communication technology –ICT – growth on a regional collaborative basis 4

6. 2. Financial markets Supporting innovation History of money – as a means of intermediation –John Law – early part of 18 th Century – “demand for money” Value not dependent on gold or silver Value - facilitates transactions Continuous innovation – capital markets Forwards/derivatives/ “atomising risk” 5

7. 3. Technology in Finance and Innovation Finance system deeply influenced by technology Technology a “financial enabler” –Enriching physical and human assets –Key driver of productivity growth Revolutionised finance – real time transfer of wealth on massive scale – within economies and across borders 6

8. 3.1 Technology in Finance and Innovation Application of technology to finance best secured by –Open, innovative and competitive financial markets –Supporting legal framework/ enforcement of contracts –Best practices regulatory environment –Risk management and good governance –Skilled people, rewarded for good judgement 7

9. 4. The challenge of IPR World Bank – IPR protection highly important –to capital poor, but labour and knowledge rich developing –economies –for SMEs reliant on strong legal system and enforcement Challenge is finding effective balance on IPR enforcement and sharing of knowledge 8

10. 4.1 The challenge of IPR Knowledge and ideas - transformed to services and products - basic ingredients to commerce and trade Innovation essential ingredient to growth – particularly important to services Protection of IPR – promotes knowledge transfer Analysis points to direct benefit – good patent regime can raise growth by 0.6% on average A vital aspect of removing “behind the border” impediments 9

11. 5. APEC and ABAC Role and Objectives Cooperation between member economies to achieve APEC objectives Business (ABAC) strongly endorses and supports cooperation between economies Central mechanism to improve human capital – capacity building 10

12. 6. Capacity Building Critical Pillar Many participants – IMF, World Bank, OECD, ADB and APEC - knowledge and experience sharing Business/academia at the “sharp end” of innovation and knowledge transfer Both want fair reward for risk and innovation Both are critical participants in capacity building 11

13. 6.1 Capacity Building Critical pillar Facilitating capacity building –For companies; open and welcoming foreign direct investment policies –Competitive markets in which innovation and reward for risk fully compensated –Protected by legal system 12

14. 6.2 Capacity Building Critical pillar APEC/ABAC encourage investment liberalisation – collective and unilateral policies of APEC APEC works with international organisations to enhance human resources skills –in building economic/social government institutions –in strengthening financial systems including anti-money laundering –promoting skills and governance in legal systems 13

15. 6.3 Capacity Building Critical pillar APEC –Recognises public and private partnerships IPR protection –Requires community-wide involvement APEC Comprehensive Strategy on Intellectual Property Rights –Model guidelines for members’ authorities to inspect, suspend, seize and destroy goods 14

16. 6.4 Capacity Building Critical pillar APEC measures cont. –ensure internet and e-commerce are not used to facilitate trade in counterfeit goods –develop model guidelines in line with internationally agreed conventions and treaties –strengthening operational contacts between national agencies –establish websites in each member economy –organise enforcement training – involving business –promote public awareness / media campaigns 15

17. 7. Summary APEC – impressive growth and development; strong and robust outlook Based on open, liberal and competitive markets and enabling investment policies Innovation/technology/ finance – deeply interrelated IPR protection – contributes to growth and prosperity –priority for APEC – IPR to grow in relevance as region integrates Capacity building - public/private partnerships 16