ABSTRACT
Trade is first of all in ideas. No goods are produced that are not first created by a human idea nor services performed without first being organized by people. The value of goods has dominated trade since its beginning and services are now a large part of that. World exports are about 30% of world GDP, up from 10% half a century ago. Less than 2% is in ideas, measured by royalty licensing. However, this trade has grown at 16% per annum in the last decades, twice that of goods and services. Digitalization may replace 40% of trade in goods through 3D printing. The digital economy, reducing risks and transaction costs, enables global trade in ideas, based on impersonal intellectual property rights. This chapter discusses the importance of (i) intellectual capital – including IP rights like patents and copyrights – and (ii) transferring and licensing them enabled by the digital economy for a number of small countries and Nordic countries. This can serve as an example for developing nations. Policies giving incentives to high-risk investments in new knowledge are needed to (i) create basic knowledge, (ii) better integrate science and technology and (iii) develop new productivity-enhancing technology.
