Last month, the USPTO released a reporttitled “Intellectual Property and the U.S. Economy: Industries in Focus”. Weekend reading material! The report “aims to promote a better understanding of the industries where IP plays a particularly important role.” The report goes on to note that “[t]he entire U.S. economy relies on some form of IP, because virtually every industry either produces or uses it.” So they may have gotten a little carried away with themselves — or did they? I defy you to identify an industry that doesn’t produce or use IP. I can’t think of one, though there are industries which are certainly more IP-intensive. According to the report, “75 industries (from among 313 total) [are] IP-intensive.” These IP-intensive industries directly accounted for 18.8 percent of all employment in the U.S. economy, in 2010.
The breakdown is even more interesting. Off the top of my head, I might have guessed that patents would lead the way. Nope. Trademark-intensive industries provided 22.6 million jobs, patent-intensive industries accounted for 3.9 million jobs, and copyright-intensive industries provided 5.1 million jobs (all data 2010). The report states that these industries accounted from “about $5.06 trillion in value added, or 34.8 percent of U.S. gross domestic product (GDP).” Note the distinction. They’re not saying IP independently added trillions in value; the industries did. But without the protections afforded by IP, would those industries generate so much revenue?
Since many IP-intensive industries are in the manufacturing sector, which has long been on the decline in terms of jobs created (but not productivity), these numbers are actually low, particularly for patent-intensive industries. Another surprise to me was that “[w]hile trademark-intensive industry employment had edged down 2.3 percent . . . copyright-intensive industries [grew] by 46.3 percent between 1990 and 2011.” Another fun fact for you to ponder this Monday morning.
Not surprisingly, IP has been recovering from the Great Recession at a higher rate than non-IP intensive industries. “[B]etween 2010 and 2011, the economic recovery led to a 1.6 percent increase in direct employment in IP-intensive industries, faster than the 1.0 percent growth in non-IP-intensive industries. Growth in copyright-intensive industries (2.4 percent), patent-intensive industries (2.3 percent), and trademark-intensive industries (1.1 percent) all outpaced gains in non-IP-intensive industries.”
Furthermore, these are good jobs, on average 42 percent higher than the average weekly wages in other (non-IP-intensive) private industries. And the discrepancy is growing, having “nearly doubled from 22 percent in 1990 to 42 percent by 2010.” Much of this corresponds to the fact that these workers are better educated than their non-IP counterparts.
Importantly, merchandise exports of IP-intensive industries accounted for 60.7 percent of total U.S. merchandise exports. The U.S. doesn’t manufacture goods, it manufactures innovation (I should be in marketing).
The report sums up the importance of IP. It’s an ideal, and hopefully one which the USPTO and Congress will seek to facilitate:
One important way to help encourage innovation is through the protection of intellectual property (IP). The investments necessary to develop IP are often quite substantial. Firms and individuals, in order to invest the necessary resources, need some assurance that they will benefit from and recover the costs of the creation of intellectual property. IP rights help protect authors, inventors, and merchants of goods and services from having their creations and innovations quickly and easily exploited by other firms or individuals, diminishing the benefits to the inventor of the IP. This reduction in private benefits to be gained from the underlying innovation could, in turn, reduce the incentives to undertake the investments necessary to develop the IP in the first place.