If you’re lucky enough to operate a business in a commercially-friendly country like the US, then you know that there are institutions in place to protect your intellectual property (IP). Unfortunately, however, this guarantee that exists in western countries doesn’t apply to many emerging countries across the world. 

Take China, for example. By some measures, it has the largest economy in the world, and yet it barely has any global brands, famous for innovation. There’s no Silicon Valley in the country, even though it churns out more scientists, researchers, and business graduates than any other country in the world. 

The reasons for this, as the authors behind the following infographic argue, is the lack of institutional support. When a company develops a new product, it needs the state to ensure that it can get rewards for all its hard work. In most countries, governments support entrepreneurs who develop new products, creating monopolies for them to make R&D worth their while. While it might seem unfair, authorities do it because they know that, in the long run, everyone benefits, including them from higher taxes. 

In China, however, institutions that protect IP aren’t as strong. While there are laws that seek to prevent the theft of intellectual property, the reality is that the institutions to enforce it aren’t strong enough – something which could explain why China doesn’t lead the world in new products outside the state sector.

If you’re interested in the IP environment in China, check out the following infographic. It charts both the problems and solutions.

Infographic by University of Alabama Birmingham