Vietnam’s leaders are taking Intellectual Property rights seriously, making efforts to bring IPR protection in line with international standards, a top Microsoft executive has said.
Craig Mundie, the company’s chief research and strategy officer, said last week that Vietnam’s improvement in IPR record would encourage Microsoft to increase its activities in the country.
“They’ve made the decision… Vietnam’s new leaders understand the need to move quickly towards a knowledge-based economy,” he said, on the sidelines of the Asia-Pacific Economic Cooperation forum last week in Hanoi.
Mundie was among more than 1,000 participants at the forum’s CEO summit.
Vietnam’s doi moi (reform) since the 1980s has turned the country into one that is increasingly market-based.
But it has yet to develop all of the regulatory and enforcement systems needed for a developed market economy and, as a result, software piracy has surged.
In its 2006 Piracy Study, software industry group Business Software Alliance, BSA, said that 90 percent of software used in Vietnam last year was pirated, making the country the world’s worst abuser of software IPR.
Mundie was unable to estimate how much piracy cost Microsoft in Vietnam, but noted that the BSA report put the total cost of piracy in the country at $38 million last year.
“We would represent a big portion of that…it’s real money,” he said.
Trying to change
As it integrates into the global community, Vietnam is trying to improve its IPR record and appears to be making some headway.
According to the BSA, last year’s piracy losses were down from $55 million in 2004.
The improvements look set to continue: this month, after more than a decade of talks, Vietnam gained World Trade Organization approval for entry.
Like a 2001 bilateral trade agreement with the US, which included stringent IPR protection clauses and set Vietnam on the path of IPR protection, WTO membership will push the country to come good on its pledge to reduce piracy.
Still, progress on the 2001 bilateral trade agreement’s implementation has been slower than hoped.
“No amount of external pressure will get countries to commit” to IPR protection, Mundie said.
Instead, he noted, governments had to conclude that protection of intellectual property was in their own country’s interest, not just that of major multinationals.
Vietnam’s leadership, he argued, had reached that conclusion.
With an effective timetable from political commitment to actual enforcement, Vietnam could see improvements in its IPR environment relatively quickly, he added.
Vietnam this year put into effect its first-ever Law on Intellectual Property rights, although much of the implementing documentation must still be written.
Seeking clues to the depth of Vietnam’s commitment, Mundie said Microsoft would watch to see whether and when government offices replace pirated with genuine software.
Improvements in its IPR record would not lead to “a cataclysmic change” in Microsoft’s business in Vietnam but would make it easier for the company to build upon operations already being carried out here, he said.
Microsoft is working with other US technology companies, the US Agency for International Development, and Hanoi University on a program to provide IT training and facilities in all of Vietnam’s 64 provinces.
Mundie said Microsoft was also discussing with Hanoi an agreement similar to that with Indonesia through which the technology giant would help the Indonesian government develop its IT industry and infrastructure, and build e-commerce and e-education facilities.
In China, Microsoft has taken advantage of high education levels to “build up research” and “radically change (its) strategy” to take advantage of the country’s high-quality, low-cost labor.
A similar strategy could be pursued in Vietnam, he noted. Mundie said he hoped to see sales and investment in Vietnam increase as the company built on efforts to convince users to buy genuine software.