OFFICE OF TRADE NEGOTIATIONS

for trade matters

SPECIAL OTN Update

October16,2012

Industrial design is the professional service of creating and developing concepts and specifications that optimize the function, value and appearance of products and systems for the mutual benefit of users and manufacturers.1 The small open economies of the Caribbean have relied for decades on being able to produce and provide commodity products to proximate markets more competitively in terms of price than producers from further locations. As the decreasing costs of the international production and distribution of similar or substitute commodities decreased the relative competitiveness of Caribbean producers, they began to rely more and more heavily on their competitive position being protected through advantageous market conditions in preference to their competitors. These preferential market conditions have now been eroding for some time and so there is an urgent need to identify new competitive strategies that would differentiate Caribbean products, both goods and services, in ways that would make consumer choices less sensitive to price differences. The creativity of the Caribbean has been recognized globally in many fields, although it is more particularly known in the arts than the sciences. Clear examples of course lie within music and entertainment services, including literature. But in very few fields has this creativity through the use of clear artistic merit been applied to globally competitive industrial output. Those niches where this has occurred have rarely, if ever, expanded beyond the artisanal or small scale production for local or regional markets. Examples largely arise in the fashion industry in the area of clothing and accessories design and production, including jewellery, handbags and shoes. This limitation in global expansion no doubt also demonstrates, amongst other things2, the lack of application of relevant industrial skill to abundant artistic output. One globally competitive Caribbean product that has taken advantage of a unique industrial design to create something of a monopolistic global market share is the design of a bottle for a carbonated beverage produced by SM Jaleel & Company Limited from Trinidad and Tobago, called

INDUSTRIAL DESIGN
A creative contribution to industry and the competitiveness of small Caribbean States

OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org

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Chubby. But as noted earlier, there are far fewer examples than might be expected from a region that has demonstrated such globally appreciated creativity. Good industrial designs, like other innovations, can be, and often are, copied by other competitors, thus losing the competitive advantage that they provide. Intellectual property laws provide the creators or owners of a design with the legal right to exclude others from using the design without requisite permission. Intellectual property rights therefore broaden the scope of successful commercial possibility for industrial designs from their exclusive use by Caribbean manufacturers to include the licensing of designs to manufacturers globally. The question to address then is how can the Caribbean expand the creation of unique and successful industrial designs for use by either Caribbean or global manufacturers. There are four or five issues that will need to be addressed in order to improve the use of industrial design by Caribbean firms, both as a competitive tool by manufacturers, and as a weightless3 product by designers; and, in terms of implementation, they can perhaps be addressed simultaneously. Many are already being addressed. What can be done? The first issue, although the one that requires the longest to provide returns, is training industrial designers. This subject should, and can easily, be integrated into the existing curriculae of both the Arts and the Sciences teaching programmes at all levels of the education system. Nevertheless, if one accepts that there is a high level of creativity generally, its introduction at the post-secondary level might bring the fastest returns. The establishment of National Design Centres would serve many needs and should include an Industrial Design component. In the context of small economies relatively advanced in their integration process, it is tempting to consider the establishment of a regional Caribbean Design Centre. The challenge or risk that this would pose, however, is that the work of the Centre then becomes too distant from the regional manufacturers that are its key target clients. One approach to overcome the conundrum that smaller economies might not have the scale or resources for a national Centre would be to use a regional Open Campus to provide this training virtually. Such Centres, whether national or regional, in addition to striving for eventual recognition as Centres of Excellence, should themselves have some distinguishing advantage over others. This will require recognition of, and acceptance of, a unique national or Caribbean sensibility in design, first and foremost by the Caribbean itself. A second issue that needs to be addressed also within the context of education and training is working with enterprises, particularly micro-, small and medium enterprises (MSMEs), on the use of design as a part of their competitive strategy. Business support organizations must themselves obviously become acquainted with the use of design as part of such strategy in order to include it in their service offering to MSMEs. This understanding of the use and valuation of industrial design by MSMEs will drive the demand for the skills eventually expected to be available from the education effort. But it can nevertheless take advantage of the existing talent. A third issue pertains to the establishment of an appropriate legal framework for the protection of intellectual property and an understanding of how it should be used in the enforcement of intellectual property rights. In the context of industrial design, as with other innovations, it must be recognized that several intellectual property rights can be used, depending on different aspects of the industrial design. For the purely aesthetic aspect of original industrial designs, in other words designs not dictated by technical or functional considerations, industrial design rights provide protection. Copyright can also be used to protect this type of aesthetic design, but industrial design generally also includes aspects related to utility that, if they meet the required criteria, can be protected by either utility certificates or patents. Ensuring effective enforcement of industrial design rights, a fourth issue to be considered, requires three components to be in place. One is awareness of how intellectual property rights are used competitively and the demonstrated capacity to use these rights in the internal market. A second is awareness by border agencies and measures that allow for action to be taken by them. The third is to have external market arrangements that allow for easy acquisition of the rights and similar scope of protection to ensure that similar action can be taken in those markets. This harmonisation of legal frameworks and decision-making is already taking place both within regional integration arrangements and multilaterally. Other issues that need to be addressed include having sufficient information and communications capacity to trade

OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org

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heavily in the digital environment; having relationships with manufacturers and competitive industrial designs; having protection and trade secret legislation; competition policies, laws and institutions. Defining Caribbean creativity Creating the environment for Caribbean creative expression to insert itself into global value chains at a point that provides best returns for input costs is not, on its own, enough. The Caribbean will need to create for itself in the global market a sense of expression that is recognizably from the Caribbean. In this, the diversity of the Caribbean and the knowledge it holds as traditional become both an advantage and a disadvantage. It is an advantage in the sense that its various influences provide fertile ground for innovation, including in creative design expression. In terms of global appeal then, because this diverse expression would be recognizable in globally diverse markets it should readily have global market appeal. On the other hand because many, if not most, of these influences come originally from other places, the resultant expression will struggle to find definition as uniquely Caribbean. It is nevertheless a necessary struggle for differentiation to improve the competitiveness of small Caribbean States. Finding a Competitive Frontier As the unique Caribbean expression is slowly unearthed it may well be strategic to focus design attention on some area in which the Caribbean could join in global leadership. It is this authors contention that an opportunity is currently presenting itself in an evolving discipline called biomimicry4. The Caribbean is recognized as a hot spot of biodiversity5 for several reasons. In many of the islands the intensity of indigenous biological diversity is high and it is easily accessible. Two of the States within the Caribbean Community (CARICOM), Guyana and Suriname, are part of the ecosystem in and around the Amazon Basin and are Members of the Amazon Cooperation Treaty Organisation (ACTO)6. As such they have access to a tremendous range of biological diversity. Belize, another CARICOM country, shares a Central American forest that lies at the cross-road between the tropical south and temperate north and as such particularly shelters endangered
________________________ 1 This definition is from the Industrial Designers Society of America (IDSA): http://www.idsa.org/content/content1/industrial-design-defined 2 Other constraints include, for example, lack of sufficient external market knowledge and access, lack of productive capacity (like machinery and equipment), and some would argue, lack of finance. 3 A weightless product is one that has little or no cost involved with its physical relocation to the consumer. This covers goods that have a high value to weight ratio, like many essential oils, and products in the digital environment. In this context it also includes the permission granted through a legal license to use an intellectual property right in accordance with specific terms and conditions. 4 See, for example, http://www.asknature.org/ and http://biomimicry.net/ . Biomimicry uses an examination of nature to solve human problems. 5 See, for example, CARICOM Interests in Relation to Biodiversity and Intellectual Property Rights in the context of the FTAA Negotiations, Paolo Bifani, 2001 6 This Treaty aims, amongst other objectives, at the conservation and sustainable use of renewable natural resources and sustainable development

broad networks and users of globally strong digital data and having robust

species from both. This ready access to a tremendous range of biological diversity provides the Caribbean with an opportunity to examine closely how nature solves problems that are currently germane to the human condition. These include the efficient use and conservation of water, energy and light, all part of what might be called eco-innovation. It may well be that focusing on biomimicry as a key design philosophy will not only help Caribbean design creativity find its unique expression, but could, along with an understanding of the competitive use of intellectual property rights, help leapfrog industry and enterprise in the small States of the Caribbean into a globally competitive frontier.
Industrial Design and Competitiveness was written by Malcolm Spence Senior Coordinator, Intellectual Property, Science and Technology Issues of the Office of Trade Negotiations. The article was first published in the fourth issue of the Caribbean Creatives magazine, which is produced by the Shridath Ramphal Centre for International Trade Law, Policy and Services under the Creative Industry Exchange (CIE). The CIE is a web portal that provides a regional mechanism for the collection, collation, analysis and dissemination of data and information on cultural/creative industries. Caribbean Creatives is available online at www.creativeindustriesexchnage.com

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OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org