What role does the Internet play in international competitiveness? How can managers protect the proprietary technology of their firms?

The internet has a profound impact on the way businesses market and distribute their products. With the internet, intellectual goods and services can be produced in one part of the world and distributed in a completely different part of the world. Additionally, the spread of information both helps and hinders the producers of intellectual property—although intellectual goods can easily span the globe and earn the producers more revenue, controlling those properties is extremely difficult and can lead to a loss of money over time.

First, it is critical to address how the internet plays a role in international competition. Due to online sales and marketing, intellectual properties such as songs, videos, literature, and other art forms can be accessed instantly from almost anywhere in the world. The ease of access to information can be a great thing for people who want to sell their properties to the widest consumer base possible. This also means a property that may have only existed in one part of the world can now exist elsewhere and enter the international market.

Consider a short story written in Hindi. Imagine this short story were to be published online in its native language in India. With the internet, that same story can be shared in France (or any other country). In fact, that story can be easily translated online, which allows the author to reach a much wider audience and earn more money for the product. That also means the story, once only marketable to an audience in India, can now compete within an international marketplace! On the other hand, anyone who has access to the short story can (illegally) take the initiative to translate it into any other language. If, for instance, the story is translated into Spanish by a third party, the author may not know and won't be able to collect revenue for their work. Additionally, the author is likely to lose control of their property as soon as it hits the web.

This story brings up another important point: how managers can protect the proprietary technology of their firms. No matter the source, the people who produce and own intellectual goods reserve the right to control the distribution of their own properties. With the internet, however, control for something like a short story is very difficult. With written properties, some managers choose to put the product behind a paywall with a third party service such as Amazon or Bluefire. These services make products more difficult to redistribute because they prevent readers from downloading, printing, or copying the product. These services may even watermark a digital version of the product so that, if an illegal version does pop up somewhere, the managers can locate the source of the copyright violator. Similar to written words, songs and videos are protected online. Publishers can use third party services like YouTube, Vimeo, and iTunes to host their intellectual work while maintaining some control over the content. Additionally, art pieces and photographic images can be published with low-quality version previews (to prevent downloads) or screen blocks (to prevent screen shots). Despite these and other ways to attempt to protect intellectual property, the internet still makes it very easy for people seeking to violate copyright to do so.