US IP: the five-trillion dollar industry
June 15, 2012
The New Legal Review
Intellectual property (IP) is responsible for $5 trillion of US gross domestic product (GDP), according to a report by the US Chamber of Commerce. Following research by the Chamber’s Global IP Centre (GIPC) into Corporate America’s creation of intangible assets, its report – IP Creates Jobs For America – reveals how those assets are influencing the US economy on a state-by-state basis.
Metrics used in the GIPC’s assessment of each state include inputs such as research and development (R&D) spend and numbers of scientist and engineer personnel; and outputs such as patents, trademarks, and copyright registrations. Examining all 50 US states plus the District of Columbia, the study found that IP-intensive industries account for 55.7m direct and indirect jobs, 74% of total US exports and more than $5 trillion in national GDP. Total US GDP stands at around $14.6 trillion.
Complete with an interactive online offering, IP Creates Jobs for America has been created to serve as a resource for legislators, policymakers and the public to better understand the vital role that innovative and creative industries play in the broader economic wellbeing of the US.
GIPC executive vice president Mark Elliot said: ‘This study shows that IP-intensive companies have a direct and significant impact on jobs, productivity, and competitiveness in every state of the union. IP’s economic contributions are evident across all states, large and small. For instance, nearly 90% of Delaware’s exports originate from IP-intensive companies – as do half of Iowa’s private-sector jobs. In Kansas, IP-intensive companies alone produce $51.1bn in output.’
Elliot added that prior research by the Chamber’s counterpart in government, the Department of Commerce, showed that innovation and creativity are key drivers for US economic growth and prosperity, and that IP-intensive industries give vital momentum to America's jobs and economic growth. But the GIPC study has expanded on that data to capture IP’s economic value outside the supply chain. ‘This report makes the benefits of IP tangible,’ Elliot said, ‘demonstrating that a wide cross-section of industries – employing tens of millions of Americans and reaching every corner of the US – hinge upon IP Rights and enforcement thereof.’
Jason Resnick, Vice President Operations at leading IP management specialist CPA Global, added: ‘The report underlines the value and importance of IP assets – not just to the companies that own them, but to the economy as a whole.
‘What’s particularly interesting,’ he said, ‘is that one of the metrics used in the GIPC assessment is R&D spend. Given that a high proportion of such spend is, in effect, wasted, it’s clear that the return on investment on successful R&D is enormous – and that those organisations which are better able to manage the innovation lifecycle stand to benefit the most, along with the economies and communities in which they’re based.’
Resnick also pointed out that, in order to cut back on wasted R&D spend, some companies were increasingly looking to develop new and more collaborative approaches to innovation, such as Open Innovation platforms. ‘This, in turn,’ he said, ‘is raising awareness at the highest levels within these companies of the importance of effective innovation and IP management, especially in the current economic environment.’