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

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 IPR concentrates profits from innovation, and with a risk of “intellectual monopolies”. Expansionary IPR trends are particularly concerning in the context of the strong global regimes of intellectual property that imply uneven economic power between the global south and north.
Such arguments would imply that IPR is increasingly a core driver of structural inequality and uneven power in the digital economy. However, there is very little empirical analysis of how such conceptual ideas unfold. Notably, given that digital innovation is increasingly understood to be incremental, distributed and often socially-orientated, further analysis is needed to examine the dynamics of IPR. This is particularly true within innovative digital products and services emerging outside leading economies.
This paper focuses on IPR in the mobile money service M-Pesa. We highlight how M-Pesa expanded from a development-orientated innovation in Kenya to become part of a global network of actors. Control of IPR has led to bottlenecks in innovation in Kenya and significant South-toNorth 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.