Report Spotlights Economic Value and Jobs Created by U.S. Copyright Industries

On December 14, the International Intellectual Property Association (IIPA) published "Copyright Industries in the U.S. Economy: The 2022 Report." The report analyzes the contributions to the U.S. economy between 2018 and 2021 by "core copyright industries" whose primary purpose is to create, produce, distribute, or exhibit copyrighted materials.

According to IIPA's 2022 report:

• In 2021, core copyright industries added over $1.8 trillion in value to the U.S. gross domestic product (GDP), amounting to 7.76% of the U.S. economy. 
• Core copyright industries employed 9.6 million workers in 2021, comprising 5.53% of total private employment in the U.S. 
• Between 2018 and 2021, core copyright industries grew at an aggregate annual rate of 6.15%, an amount three times higher than the average annual 1.76% growth rate of the entire U.S. economy during that four-year timespan. 
• Core copyright industries accounted for 52.26% of the U.S. digital economy in 2021.
• Sales of U.S. copyright products in "selected" core industry sectors – recorded music; motion pictures, TV, and video; software publishing; and non-software publications including newspapers, books, and periodicals – amounted to $230.3 billion in 2021, an increase. 

IIPA's 2022 report also estimates the value of economic contributions by "total" copyright industries in the U.S., including industries in which copyrighted goods are only an aspect of their businesses as well as industries that facilitate the creation and production of copyrighted works and industries that develop computers and other devices that support usage of copyrighted goods. According to the report, the value added to GDP by total copyright industries was more than $2.9 trillion, or 12.52% of the U.S. economy. 

In our book, Modernizing Copyright Law for the Digital Age: Constitutional Foundations for Reform (Carolina Academic Press, 2020), Free State Foundation President Randolph and I credit the wisdom of the American Founders in according copyright protections to authors and other creative artists in the U.S. Constitution's Article I, Section 8 Copyright Clause. As we explain in chapter 3 of our book, those constitutional protections rest on a foundational understanding of copyrights as unique forms of private property that can be used and exchanged in a free market setting. IIPA's 2022 report shows that the American public, including the creators who make their living by creating, performing, and selling copyrighted content, continue to benefit greatly from the Founders' constitutional policy favoring copyright protections.  

The Core Copyright Industries Continue to Boost the U.S. Economy

On December 6, 2016, the International Intellectual Property Alliance (IIPA) published its 2016 report entitled “Copyright Industries in the U.S. Economy.” The new report, authored by Stephen E. Siwek, finds that the “core copyright industries,” – that is, industries whose primary purpose is to create, produce, distribute or exhibit copyright materials – generated $1.2 trillion in economic activity in 2015, accounting for 6.88% of the U.S. economy. In the same year, the core copyright industries employed 5.5 million workers, which is 3.87% of the entire U.S. workforce.

At a time when much attention is focused on reviving America’s economic growth and job creation prospects, these figures should not be lightly dismissed.

The core copyright industries do not just comprise a substantial portion of the American economy; they continue to grow at an above average pace. Between 2012 and 2015, the core copyright industries grew at an aggregate annual rate of 4.81%. This is 127% greater than the growth rate (2.11%) for the entire U.S. economy over the same period. Furthermore, the average annual compensation paid to core copyright workers is $93,221, which is 38% higher than the average annual compensation paid to all U.S. workers, $67,715.

Additionally, the core copyright industries are a key contributor to U.S. exports. The new report finds that sales of selected U.S. copyright products in overseas markets amounted to $177 billion in 2015, a significant increase from $164 billion in 2014. This is impressive considering that other major industries, such as chemicals, pharmaceuticals and medicines, agriculture, and electronics saw little or no growth in their respective exports over the same period. (See the chart below.)

Foreign Sales & Exports for Selected U.S. Industries (Billions of U.S. Dollars)	2014	2015
Selected Copyright Industries (Motion Pictures, TV, Video, Recorded Music, Newspapers, Books, periodicals, Software Publishing)	$164.4	$177.0
Chemicals	$145.9	$135.8
Aerospace Products and Parts	$129.0	$134.6
Agricultural Products	$72.9	$62.9
Electrical Equipment, Appliances & Components	$60.6	$60.3
Pharmaceuticals & Medicines	$54.5	$58.3

In a December 2016 blog, Michael Horney discussed why it is important for President-elect Donald Trump to reconsider his apparently negative perception towards the Trans-Pacific Partnership (TPP) and similar trade agreements. By implementing strong Intellectual Property protections for 12 member countries, TPP would incentivize creation and innovation among American (and foreign) entrepreneurs. If TPP is adopted, the U.S. would see a significant increase in the amount the U.S. exports, including core copyright and IP-intensive industries.

The IIPA’s report shows that the core copyright industries play a large role in the U.S. economy and that these market segments are growing at a faster rate than most U.S. markets. The United States’ robust protection of intellectual property rights has incentivized creation and entrepreneurial activity that has not only benefitted American consumers and workers, but also has spurred economic activity overseas.

The core copyright industries continue to boost the U.S. economy!

Strong IP Rights Add Value to the U.S. Economy

According to a study released this week by the International Intellectual Property Alliance (IIPA), copyright-based industries added an unprecedented $1 trillion to the U.S. economy in 2012, accounting for 6.5% of the total economy. The copyright-based sector of the economy also grew faster than the national economy from 2009 – 2012 at a rate of 4.73% compared to a rate of 2.14% for the rest of the national economy. Nearly 5.4 million people are employed in copyright-based industries, and those employees generally make 33% more than the average annual wage. The main industries that are part of the core copyright industry include computer software, videogames, books, newspapers, periodicals, journals, motion pictures, music, radio, and TV broadcasting.

These impressive statistics indicate the importance of continuing to provide support and incentives in the core copyright-based industries. To do so, it is crucial that copyright law strikes the right balance between protecting property rights and fostering creation. Proper and enforceable intellectual property protection is indispensible to promoting and maintaining a vibrant copyright-driven sector, and a healthy digital age economy as a whole. The author who conducted the study for IIPA, Steven Metalitz of Economists, Inc. stated, “to foster continued growth of this dynamic sector, we need strong and modern copyright laws that take into account changes in technology and the continuing harm caused by copyright piracy, especially as legitimate digital distributors continue to emerge.”

For more on the proper approach to intellectual property protection in a digital age economy, see the series of Perspectives from FSF Scholars by Free State Foundation President Randolph May and Research Fellow Seth Cooper:

•                The Constitutional Foundations of Intellectual Property

•                Reasserting the Property Rights Source of IP

•                Literary Property: Copyright's Constitutional History and Its Meaning for Today

•                The Constitution's Approach to Copyright: Anti-Monopoly and Pro-Intellectual Property Rights