USPTO Report Shows IP's Tremendous Value to the U.S. Economy and Employment

Tuesday, April 26 was "World IP Day." The importance of copyrights to the U.S. economy and policy imperatives for better securing them were subjects of my Perspectives from FSF Scholars, "World IP Day 2022: Strengthen Copyright Protections for Creative Works." That Perspectives cited findings contained in a report by the U.S. Patent and Trademark Office titled "Intellectual Property and the U.S. Economy: Third Edition." Published in March 2022, USPTO's report focuses on so-called "IP-intensive" industries that primarily create or produce patents, trademarks, and copyrights. As described in my Perspectives:

[S]o-called "IP-intensive" industries … accounted for $7.8 trillion in U.S. gross domestic product (GDP). In 2019, IP-intensive industries supported 62.5 million jobs, or 44% of U.S. employment. The report concluded that copyright-intensive industries accounted for about $1.3 trillion in GDP that year. Yet the benefits to the U.S. economy from copyrights are much greater than that, since the USPTO's definition of "copyright-intensive industries" excludes several lucrative industries, including book and music stores that distribute copyrighted goods. Notably, "[c]opyright-intensive industries outpaced other IP-intensive industries with respect to GDP growth since 2014—rising by 4.2%" And copyright-intensive industries supported 6.6 million jobs in 2019, up from 5.7 million five years before. 

To put the growth of copyright-intensive industries in context, the USPTO report explained that "GDP grew by 2.4% per annum between 2014 and 2019, which means that the share of total output accounted for by the copyright-intensive industries was the only share that grew signifcantly [sic] during this period." Additionally, the USPTO report found that copyright-intensive industries accounted for 7% of GDP in 2019 and 4% of U.S. employment. Furthermore, during the 2010s, "[j]ob growth was most rapid during this time in the copyright-intensive industries, adding nearly 30% more jobs and far outstripping the 18% gain made by the non-IP-intensive industries." 

These findings amplify the importance of having strong copyright protections in order to ensure that creative-minded individuals have the financial incentive and means to develop, invest in, and market their creative works. Free State Foundation President Randolph May and I wrote more about this in our book Modernizing Copyright Law for the Digital Age: Constitutional Foundations for Reform (Carolina Academic Press, 2020). 

The USPTO report also includes informative appendices. One appendix breaks down IP-intensive industries into 13 categories, including "Advertising and related services," "Computer systems design and related services," "Newspaper, periodical, book, and directory publishers," Motion picture and video industries," and "Sound recording industries." Another appendix provides shares of private sector workers in IP-intensive industries as of 2019, categorized by state. 

The USPTO's report on IP-intensive industries is available here.

IP-Intensive Industries Make Significant Contribution to European Economies

A new joint study by the European Union Intellectual Property (IP) Office and the European Patent Office entitled “Intellectual Property Rights Intensive Industries and Economic Performance in the European Union” finds that IP-intensive sectors make a significant contribution to European economies.

Here are some of the key findings regarding IP-intensive industries in Europe:

• IP-intensive industries generated 27.8% of all jobs in the EU during the period 2011-2013. On average over this period, 60 million Europeans were employed by IP-intensive industries. In addition, another 22 million jobs were generated in industries that supply goods and services to the IP-intensive industries. Taking indirect jobs into account, the total number of IP dependent jobs rises to 82.2 million (38.1%).

• Over the same period, IP-intensive industries generated more than 42% of total economic activity (GDP) in the EU, worth €5.7 trillion. IP-intensive industries account for approximately 90% of the EU’s trade with the rest of the world.

• IP-intensive industries pay significantly higher wages than other industries, with a wage premium of 46% over other industries. This is consistent with the fact that the value added per worker is higher in IP-intensive industries than elsewhere in the economy.

• IP-intensive industries have proved most resilient to the economic crisis. Comparing the results of this study with those of the 2013 study reveals that the relative contribution of these industries to the EU economy slightly increased between the two periods 2008-2010 (2013 study) and 2011-2013 (2016 study).

• The detailed analysis of the economic weight of industries engaged in the development of climate change mitigation technologies (CCMTs) shows that they account for 1.2% of employment and 2.1% of economic output in the EU. They generated a substantial trade surplus for the EU and, despite a small drop in employment, were able to increase their GDP contribution between the two periods 2008-2010 and 2011-2013.

This study supports what FSF scholars have stated for many years: strong IP rights protections encourage increased economic activity because they enable and promote creativity, innovation, and investment from artists and entrepreneurs throughout the entire economy. And, importantly, as the new European study shows, securing IP rights grows jobs and wages.