All that Ms. Chang would do is to apply for the patent protection and then franchise a local company to manufacture the CAD system with full assurance that the product will be right protected and the business will still have the same business profits as it is in Singapore.
As a matter of fact, the machine, being so sophisticated will require importation of skills and manpower from the Singapore mother company since they are the ones who are familiar with its operations and can set it up within the licensed company in Pakistan. This makes it easier to have control over the operations of the machine and the levels of output as the technicians will have to be always around to supervise the smooth operation of the system.
Even though the levels of manufacturing in Singapore is above the levels of manufacturing in Pakistan, it still remains to be slightly lower than the surrounding neighbors like Taiwan and South Korea hence the export economy of that region is dominated by non-Singaporean transnational corporations (TNCs) (Gary Dean, 2000). This further emphasizes that the option of exporting from Singapore would be a short-term success since once the technology catches up in the region, there is a likelihood that that the export giants would take over the markets.
The other factor that would make the licensing a better option is the demand that Pakistan has for carpets from the world in general. Indeed, there are several unfinished carpets from other countries like Afghanistan that are transported to Pakistan for final finishes before being exported to other countries. This is due to the expertise that there is on carpet making in Pakistan.
The carpets produced in Pakistan are mainly for the export markets particularly to the Western countries which bring in almost 300 million dollars annually catering for an average of 3.4% total export share (All Things Pakistan, 2010).
By 1953, Pakistan was considered one of the most under developed countries in the world it however managed to turn around this bad legacy to appositive legacy. In 2004, there was an estimated 6.4% GDP growth with an inflation that remained as low as 4.6%. These achievements have enabled the country to be on the right track towards fiscal consolidation and the government has as well increased funding on the education and health sector, an indication of a healthy and more educated nation in the near future. Of more significance in the case of Ms. Chang is the fact that the Pakistan government also launched far-reaching structural reforms aimed at wide privatization of the public sector, to liberalize external trade, strengthen the public as well as the corporate governance and to reform the banking sector (American Institute of Pakistan Studies, 2011). All these are indicators to a better trading environment that would see the business of Ms. Chang grow without many sanctions or hurdles.
All Things Pakistan, (2010). Handmade Carpets of Pakistan. Retrieved December 14, 2011 from http://pakistaniat.com/2010/04/07/handmade-carpets-of-pakistan/
American Institute of Pakistan Studies, (2011). About Pakistani Economy. Retrieved December 14, 2011 from http://www.pakistanstudies-aips.org/pakistan/economy/development.html
Gary Dean, (2000). The role of FDI in the development of Singapore. Retrieved December 14, 2011 from http://okusi.net/garydean/works/fdising.html
Khursheed Khan & Associates, (2011). Pakistan Patent Ordinance 2000. Retrieved December 14, 2011 from http://www.pakistanlaw.com/memorandum_newpatent_law.php.