Insights
The Economics of Intellectual Property
October 4, 2013
- Buzz
- The Economics of Intellectual Property
Investment in intellectual property (IP) can be a key indicator of a company’s growth potential, but historically it has been difficult to get reliable data on the effect that intellectual property has on the wider economy.
This week, the European Patent Office and Office for Harmonization of the Internal Market released a new report on IP-rights intensive industries, which shows the major contribution that IP has on economic performance and employment in the European Union (EU).
Looking at IP data from 2004-2008, the EU report found that:
- IP-intensive industries contribute €4.7 trillion to the EU economy each year, amounting to 38.6% of the single market's total economic output.
- IP-intensive industry salaries are 41% higher than non-IP-intensive industries.
- Between 2008-2010, IP-intensive industries represented 25.9% of total employment in the EU.
- 88% of EU imports and 90% of EU exports consist of products from IP-intensive industries.
The EU report was designed to mirror the report released in 2012 by the Economics and Statistics Administration and the United States Patent and Trademark Office, Intellectual Property and the U.S. Economy: Industries in Focus. Also looking at IP data from 2004-2008, the US report found that:
- IP-intensive industries contribute more than $5 trillion to the US economy each year or 34.8% of the GDP.
- Jobs in IP-intensive industries pay 42% higher wagers than jobs in non-IP-intensive industries.
- In 2010, 40 million jobs, or 27.7% of all jobs, were directly or indirectly attributable to the most IP-intensive industries in the US economy.
It is encouraging to note that regardless of the economic climate, IP, invention, and innovation continue to be a driving and sustaining force around the world.
