Intellectual Property and the Innovation Economy: Bangladesh's Next Growth Engine

In today's global economy, the primarydrivers of economic growth and long-term success are no longer cheap labor orraw materials. Instead, they are the power of knowledge and innovation, securedby Intellectual Property (IP). Higher profit margins are established when anation moves beyond merely manufacturing products to owning the knowledge andtechnology required to create those products. For local industries to secureelevated profits, adopting a strategy focused on IP creation and transitioningto research-based production is now indispensable.

Our economy stands at a criticaljuncture. International competition will intensify significantly followingBangladesh's graduation from the Least Developed Countries (LDC) status. Tomeet this challenge, we must move away from conventional production methods andsubstantially increase investment in Research and Development (R&D).Unfortunately, Bangladesh currently allocates only 0.03% of its Gross DomesticProduct (GDP) to R&D (Planning Commission data, 2022–23). This comparespoorly to neighboring countries, such as India at 0.7%, Vietnam at 0.54%, andChina at 2.55%. This disparity clearly presents a major obstacle to developingour innovation economy.

However, there is a positive trend:interest in R&D investment from the private sector is growing. According tothe Bangladesh Bureau of Statistics (BBS), approximately 72.63% of totalR&D expenditure in the 2021 fiscal year came from domestic sources,primarily the private sector. This suggests that our entrepreneurs are startingto prepare for the future.

An innovation cannot remain merely aconcept; it must be legally protected. This protection is the foundation ofintellectual property. When a company secures its innovation through a patent,copyright, or trademark, it gains an exclusive commercial advantage, whichdirectly paves the way for higher profitability. This strategic move grants thelocal industry a strong position in the global market.

To achieve higher profitability, ourlocal industry must rapidly embrace this transformation. This necessitates awell-thought-out strategic roadmap. At this pivot point toward aknowledge-based economy, the full implementation of the World TradeOrganization’s (WTO) TRIPS (Trade-Related Aspects of Intellectual PropertyRights) Agreement presents a significant opportunity for Bangladesh.

The TRIPS agreement establishesinternational standards for IP protection, helping our local innovators andindustries protect their intellectual assets globally. When a country adheresto stringent IP standards like TRIPS, multinational companies are encouraged toinvest and transfer technology. For example, global giants like Microsoft orSyngenta feel comfortable operating in a country with their cutting-edgesoftware, seed technology, or chemical formulas when they seeinternational-standard legal protection for their patents and copyrights. Byfully implementing the TRIPS agreement, Bangladesh can ensure high-quality IPprotection, which will not only benefit domestic innovators but also attractadvanced technology and research-based employment through foreign investment,thus building the foundation for sustained, higher economic growth.

It is within this context that I wouldlike to introduce my new venture, LABAID AI. My long experience in thehealthcare and technology sectors has led me to understand that future serviceswill be Artificial Intelligence (AI)-based. This newly established institutionis pioneering a new horizon in HealthTech. Crucially, LABAID AI has launchedwith the protection of eight groundbreaking patents. These eight patents set arare precedent, not only in the wider South Asian region but globally.

The government should provide special taxexemptions to encourage private sector investment in R&D. Currently, excessiveR&D expenditure is often treated as revenue and taxed, which discouragesinvestment. It is essential to change this policy and create a separate taxstructure for R&D activities.

The Department of Patents, Designs andTrademarks (DPDT) must be modernized, and its legal processes made faster andsimpler. Bangladesh's current weak ranking in the Intellectual Property RightsIndex (IPRI) (Global Rank 114/126 in the 2025 IPRI) creates obstacles forforeign investment and technology transfer. Legal protection must be reinforcedso that initiatives like LABAID AI can easily protect their innovations.

We must establish strong links betweenuniversities, research institutions, and local industry. Academia should beencouraged to conduct market-driven research, and policies must be formulatedfor the commercialization of innovations. The fact that the talented youngdomestic workforce built the technology for LABAID AI proves that they cancompete globally if given the right environment.

We must shift our focus from apparel andother lower-skilled sectors to high-tech, knowledge-based industries likePharmaceuticals, ICT, HealthTech, and Engineering. These sectors offer thehighest potential for maximizing profits through patents. The Bangladeshipharmaceutical industry is already showing a positive sign by spending well ondomestic R&D (approximately BDT 23,735 per employee).

A successful business is not just aboutprofit and loss; it creates value for the future. I firmly believe that thenation that protects its talent and innovation is the nation that will reachthe economic pinnacle. The launch of LABAID AI with eight global patents ismore than just a business beginning—it is a clear message in Bangladesh’sindustrial history: we are ready to lead the world.

To achieve higher profits and build asustainable economy, every industrial enterprise must adopt research andinnovation as its core mantra. By protecting intellectual property, we will notonly safeguard our current assets but also establish a foundation for ourfuture generations to compete in the global marketplace. This path holds thegolden gate to the economic prosperity of developing Bangladesh.

Writer: Sakif Shamim: Managing Director, Labaid Cancer Hospital and Super SpecialtyCenter