1. International, Legal and Social Aspects of Entrepreneurship
A. “Intellectual Property and the Property Rights Movement”
(Summary) “The philosophical, legal, economic and political bases for protecting intellectual property and tangible property differ in significant ways.” The philosophical foundation of protecting tangible property is the belief that “every man has an inherent property interest in his own person and by extension, in the labor of his body, subject to there being 'enough, and as good left in common for others.'” By contrast, protection of intellectual property emerged from a specific utilitarian constitutional directive: “to promote the Progress in Science and the useful Arts.” As such, intellectual property rights diverge significantly from tangible property rights in that while the latter are considered absolute rights - perpetual, exclusive and inviolate, the former protects works only for limited duration and exclusivity. Furthermore, the economic justification for intellectual property is to promote an efficient level of innovation in the context of a competitive market. That is, its intent is to encourage investments in developing new technologies and creative works that would otherwise not be made if rivals could imitate and exploit them before the original inventors could reap their benefits. By contrast, the economic justification of tangible property is the scarcity of a particular means or resource. Unlike tangible goods, the use knowledge and creative works is nonrivalous. That is, “one agent's use does not limit another agent's use.” On the contrary, knowledge is by nature “nonexcludable” and cumulative. “Inventors today 'stand on the shoulders of giants' in pushing the frontiers of science and technology.” “Authors, artists, and musicians build on and respond to the creativity of those who came before.” This is why “exclusive rights of the character associated with real property would stand in the way of technological and expressive progress in many areas of creativity if applied to intellectual property”; which is precisely why intellectual property laws provide only limited exclusivity. Another difference between tangible and intellectual property relate to clarity of establishing and transaction cost of verifying property boundaries.
(Reaction) To my mind, the fundamental difference between tangible and intellectual property lies in the universal nature of knowledge. That is, there is only “one” knowledge of a particular something. For instance, for a specific technology, there is exactly one logical arrangement of components that corresponds to that technology. Therefore, granting perpetual, exclusive rights to it would be like granting perpetual, exclusive rights to owning a house (as opposed to a specific house). That is, it would be tantamount to prohibiting anyone else from owning a house. The fact that knowledge is also cumulative compounds the issue. New knowledge builds upon existing knowledge (which cannot be said of tangible property; to build a new house one does not need an existing house.) Therefore, prohibiting use of existing knowledge does not only impede but makes creation of new knowledge impossible. (This is, of course, mitigated by the fact that in reality the use of knowledge is not exclusive i.e. the same knowledge can be used as many people as there are and that it is practically impossible to prohibit use of a particular knowledge or at least not as easy as prohibiting use of tangible property which physically exists in time and space). This is not to suggest that intellectual property should be abolished since like tangible property it is also a product of a man’s labor and it is only right to allow him to benefit from it. The point, however, is intellectual and tangible property cannot be treated in the same way (and consequently, cannot be protected by the same or very similar laws) since they are fundamentally different.
B. “Some Fundamental Issues in International Entrepreneurships”
(Summary) “International entrepreneurship is the discovery, enactment, evaluation, and exploitation of opportunities—across national borders--to create future goods and services.” It has evolved from a focus on new ventures to include corporate entrepreneurship and traces its roots from both the fields of entrepreneurship and international business. Since firms use their networks to gain access to resources, to improve their strategic positions, to control transaction costs, to learn new skills, to gain legitimacy, and to cope positively with rapid technological changes, network theory provides a powerful framework for studying of international entrepreneurship. As the entrepreneur’s network represents social capital that he draw can upon, the entrepreneurial firm can also leverage its role and position within a network of relationships and exploit opportunities emerging from this network to: 1) acquire and control assets without incurring the capital investments; and 2) enter foreign markets rapidly. Like networks, organizational learning and the capacity to build knowledge stocks and create new knowledge are “critical to the entrepreneurial firm competing internationally because knowledge is often the most critical asset of the firm and is its primary basis of achieving competitive advantage.” Furthermore, entrepreneurial firms competing in international markets need to acquire local market knowledge. In this perspective, the importance of learning theory and the related study of knowledge management in relation to international entrepreneurship becomes apparent. Studies of international new ventures within the framework of learning theory and knowledge management emphasize the need for such ventures to “effectively manage the learning process to compete successfully in the international arena.”
(Reaction) International entrepreneurship is the natural consequence of the entrepreneurial spirit in the context of globalization. As foreign markets, resources and sources of funding become more and more accessible (through technological and economic innovations), more and more entrepreneurs and entrepreneurial firms (consistent to their nature) will seek to discover and exploit international opportunities. The entry of entrepreneurs into the international market has a compounding and reinforcing effect since as the number of firms engaged in international entrepreneurship increases, the necessity of international entrepreneurship also increases. That is, as more and more firms take advantage of international markets and resources to increase revenues and cut costs, going international for other firms becomes a matter of survival.
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