Do a quarter of our jobs depend on IP protection?

Dr Mark Egerton

By David Loch

Dr Mark Egerton

For more information about protecting IP contact Dr Mark Egerton

As an IP professional, I have always believed that the efficient protection of intellectual property rights (IPRs) encourages creativity and innovation. In the modern economy, this seems more important than ever. But to exactly what extent the protection of these rights really contributes to the economy is hard to judge.

A joint study by the Office for Harmonization in the Internal Market (OHIM) and the European Patent Office (EPO) has recently gone some way to answering this question. The report aimed to provide some insight into the contribution of IPR-intensive industries to the economy of the European Union (EU). The study focused on 321 industries that had a higher than average use of intellectual property rights, which included trade marks, patents, designs, copyright and geographical indications, and what impact these industries had on employment, wages, economic output and trade for the period 2008 to 2010.

Strikingly, the study found that almost 1 in every 4 jobs in the EU, or the employment of roughly 57 million Europeans, are directly attributable to IPR-intensive industries. If you include indirect employment provided by suppliers of IP-intensive industries, this figure rose to just over a third (35%) of all EU employment or 77 million jobs, with the largest proportion of these jobs generated by trade mark-intensive industries.

Not only were IPR-intensive industries found to generate jobs, they also pay their employees significantly (41%) more per week than their non-IPR-intensive counterparts. This wage premium was shown to be even higher at 64% (or an extra € 324 per week) for patent-intensive industries and 69% (or an extra € 349 per week) for copyright-intensive industries. The study’s authors attribute this difference in pay to the fact that the value added per employee in IPR-intensive industries is far greater than other sectors of the economy.

The value of IP protection seems to go beyond employment however. The joint study also demonstrated that external trade by the EU was dominated by the IPR-intensive industries. In total, they accounted for 88% of all imports and 90% of all exports for the period 2008 to 2010. Though small in percentage terms this represents an important trade surplus for the Union. Furthermore, IP-intensive industries were shown to be a powerhouse of the EU’s own economy, generating close to 40%, or a staggering € 4.7 trillion, of total economic output as measured by gross domestic product, over the two year period studied.

Of course the study did not establish that the protection of IP was the direct cause of these economic benefits, and nor did it set out to. Nonetheless, it clearly reinforces the vital role of industries that intensively utilise IPRs, and specifically patents, trade marks, designs, copyright and geographical indications, in driving performance and employment in today’s modern, knowledge-based economy. It is perhaps another reminder for all of us to review what IP our organisation holds, how well it is protected, and what we could be doing to maximise its contribution to our success.