Intellectual property rights and control in the digital economy: Examining the expansion of M-Pesa

Abstract

The importance of intellectual capital in the digital economy implies an increasingly central role of intellectual property rights (IPR). However, there are concerns that the expansion of intellectual property rights concentrates profits from innovation, creating “intellectual monopolies”. This is particularly concerning with respect to strong global regimes of intellectual property that foster economic inequities between the Global South and North. Such arguments imply that IPR is a core driver of structural inequality in the digital economy, yet there is very little empirical analysis of how such conceptual ideas unfold. This study focuses on IPR in the Kenyan mobile money service M-Pesa. It charts how M-Pesa expanded from a development-orientated innovation in Kenya to become part of a global enterprise. Control of IPR has led to bottlenecks in innovation in Kenya and significant South-to-North financial transfers. Overall, this case contributes to expanding the debate about patterns of innovation and governance of the digital economy. As digital firms expand, unpacking the processes by which global intellectual property regimes and cross-border IPR practices shape uneven power relations and inequality is vital.