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Amid all the news from Japan about the earthquake and tsunami, I wanted to write a post about the economic effects of that disaster. Of course the real costs come with the loss of life, but loss of infrastructure, electricity, and fresh water will cause hardships for the economy as well, as reflected in a lower valued Yen and lower investment levels.

Another article caught my attention today–China Says 3001 Arrested For Product Piracy. The article suggests that China may be getting more motivated to enforce patent and copyright laws. The suggestion was made that the ability to copy technology has prevented entreprenuers from innovation.

“Intellectual property protection is essential for building an innovation-oriented country and achieving a shift from `China manufactured’ to `China innovated,'” Li Chenggang, deputy director of the Commerce Ministry’s law department, said at a news conference. He was joined by officials of China’s commerce, intellectual property and other agencies.

My conversations with friends here, many of them managers of American or European factories, suggests that it will be a long time before the Chinese will be able to think and work in an innovative way. I suspect that these arrests are mostly to temporarily ease foreign complaints about piracy.

I also believe that the complaints are coming from production companies who are the main benefactors of patent and copyright laws. The real innovation comes from designers, authors, and musicians who are motivated more by their work than by profits.  Of course business is also capable of innovation, but much of the rewards for real innovation do not find their way to the individuals responsible, only to the people that hire them.

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