April 25, 2012 Leave a comment
Most experts and policymakers are aware of the critical role innovation plays in the U.S. economy. It underpins our competitive advantages and is the source of continued economic growth and prosperity. As America seeks to regain its competitive edge in the wake of the Great Recession, innovation remains a major point of discussion in policy circles. A key factor that has enabled America’s strong innovation environment is intellectual property and its standards. A solid intellectual property (IP) regime, and the rights it guarantees, provides innovation incentives and protections, creating a climate the rewards risk-taking, creative thinking, and ceaseless advancement. It’s safe to say that intellectual property is important to the U.S. economy, but just how important?
The U.S. Department of Commerce just released a joint report from the Economics and Statistics Administration and the U.S. Patent and Trademark Office that goes a long way in answering that question. The report cites that IP has both direct and indirect benefits for almost every industry, and these benefits flow upstream and downstream in the production chains. IP is used “everywhere in the economy” and the rights granted to holders of IP “support innovation and creativity in virtually every industry.” While all industries rely on some form of IP, the report identifies 75 industries as “IP-intensive,” approximately one quarter of all domestic industries. They account for almost 20% of all U.S. employment and tend to pay average weekly wages at a 42% premium. In addition, every two IP-intensive jobs support another one indirectly, thereby raising attributable employment to almost 30% of total employment. These industries account for over $5 trillion in value-added to U.S. GDP and contribute to over 60% of total goods exports and roughly 20% of all services exports.
The data above clearly support the vital importance of intellectual property to American innovation and the economy at large. This understanding makes it critical that the United States continue to protect intellectual property at home, and especially abroad. It is a primary source of U.S. exports and the root of its competitive advantage in trade. The continued protection of American ideas and intellectual capital promotes “innovative, open, and competitive markets, and helps to ensure that the U.S. private sector remains America’s innovation engine.”
Posted by Brian Gowen
Sources: The U.S. Department of Commerce