As 2017 begins, it is a good time to reflect on the impact that intellectual property has on the economy, particularly in light of a US Department of Commerce/USPTO’s report on the subject.
The latest indicators of the value of IP
In 2012, the US Department of Commerce issued ‘Intellectual Property and the US Economies’, a report that identified industries relying most heavily on patents and trademarks. Periodically the report is updated, most recently in September 2016. The report measures the intensity of IP use and its relationship with economic indicators such as employment, wages and value add.
Revenues driven by IP value
The 2016 update identifies 81 industries that are considered IP intensive. Included in the list are some expected industries such as software publishing and pharmaceuticals. However, the creative industries – where focus on IP may not be seen by some as so important – also featured prominently including; sound recording, audio and video equipment manufacturing, cable and other subscription programming, performing arts companies, and radio and television broadcasting.
These 81 collective industries were responsible for some $6.6 trillion in value added in 2014, representing 38% of total US GDP. This is an incredible figure. Almost four in every ten dollars generated in the US economy relates to IP intensive industries. Furthermore, these industries directly supported some 28 million jobs and indirectly provided work for 17 million more. In total that is almost one third of US employment. IP intensive industries significantly outperform non-intensive industries proportionately in both job creation and wealth creation.
Workers in the private sector employed in IP intensive industries also earned more than those in other industries. In 2014 this equated to an average weekly wage of $1312, almost 50% higher than the $896 average weekly wage for non-intensive industries.
At least one glass ceiling appears to have shattered since 2010. Historically workers in IP intensive industries were over represented by those with a bachelor’s degree or higher. The historical educational gap now seems to have largely disappeared. By 2015 there was virtually no difference between the percentage of degree educated workers in IP intensive industries compared to others.
What do we learn from this report?
There is no debate about the added value of IP to the economy and individuals lives. IP intensive industries significantly outperform other industries, and employees in IP intensive industries generate more revenue and earn more money. The challenge for the future must focus on how the remaining industries that are not classified as IP intensive can develop innovation strategies that will enable them to join the IP intensive club.
Interested in reading about IP as an investment in future economic prosperity, read more here.