Tuesday, May 28, 2013

IP's Growing Contribution to Nation's Economy

We're devoting more attention these days at the Free State Foundation to the protection of Intellectual Property rights. In part -- perhaps principally -- this is because protecting IP rights, like other property rights, is goes hand in hand with safeguarding individual freedom. Indeed, as my colleague Seth Cooper and I showed in our recent Perspectives paper, "The Constitutional Foundations of Intellectual Property," protection of intellectual property rights has a firm grounding in natural law philosophy and a constitutional basis.

But aside from the protection of property rights that inheres in FSF's rule of law and individual liberty emphasis, protection of IP is important, and increasingly so, because of its positive contribution to the nation's economic well-being. On this score, there is an op-ed in today's Wall Street Journal [subscription required] by Osagie Imasogie and Thaddeus Kobylarz which makes this point effectively in the context of noting that the U.S. government is revising the way it calculates the the nation's GDP to include intellectual property expenditures. I commend the entire piece it to you, but in the meantime here are two brief excerpts:

"In the past two decades, intellectual property has emerged as the principal driver of economic growth in the U.S. and other developed countries. IP is now, in many respects, the new global currency. This is largely the result of America's successful effort to internationalize its views regarding the economic importance of IP protection, notwithstanding the continuing challenge of piracy. In short, America's place as a world economic leader depends on its ability to cultivate a sufficiently creative "mint" by which to generate, and profit from, this new global currency."

* * *

"Last year, the U.S. Patent and Trademark Office reported that "IP-intensive" industries supported at least 40 million jobs in the U.S., contributing more than $5 trillion to the economy and accounting for 34.8% of GDP. Given these figures, it is understandable that the Bureau of Economic Analysis would seek to bring the definition of GDP more in line with the actual economy."

So, protecting IP rights is not only important as a matter of law and philosophy, but also as a matter of sound economy policy.