European Patent Office and Office for Harmonization in the Internal Market (2013)
|The Office for Harmonization in the Internal Market and the European Patent Office (2013)|
|Title:||Intellectual Property Rights Intensive Industries: Contribution to Economic Performance and Employment in the European Union|
|Author(s):||The Office for Harmonization in the Internal Market and the European Patent Office|
|Citation:||Intellectual Property Rights Intensive Industries: Contribution to Economic Performance and Employment in the European Union, The Office for Harmonization in the Internal Market and the European Patent Office (2013) available at http://ec.europa.eu/internal_market/intellectual-property/docs/joint-report-epo-ohim-final-version_en.pdf.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||In order to determine which industries are IPR-intensive, the register databases of OHIM and EPO were matched with the commercial database ORBIS. The resulting matched database contains data on approximately 240,000 companies, including the number of Community Trade Marks, Registered Community Designs and patents applied for by each company, along with the industry classification and various financial and economic variables for each, providing a set of data that can be used in future, more detailed studies.
In assessing the contribution of each industry to the economy, what is being measured are the jobs and GDP generated by that industry in each Member State and in the EU, and not the origin of the underlying IPR. Therefore, no conclusions as to how innovative a particular country is can be drawn on the basis of this study alone. The higher contribution of patent–intensive industries could equally be the result of decisions on where to site production which were taken in a different country.
|Data Type:||Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||Yes|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
This report aims to provide the first broad, credible assessment of the combined contribution of industries that make intensive use of the various types of Intellectual Property Rights (IPR) to the economies of the EU as a whole and of the individual Member States. Croatia became the EU’s 28th Member State on 1 July 2013. However, since not enough data for Croatia was available when the analysis was conducted in autumn 2012 and spring 2013, the study only includes the 27 pre-July 2013 Member States.
The study covers a broad range of IP rights – trade marks, patents, designs, copyright and Geographical Indications (GIs) – and considers a variety of economic indicators, in particular Gross Domestic Product (GDP), employment, external trade and wages. It makes no policy recommendations, as this is not within its scope. Instead, it is designed to provide evidence that can be used by policymakers in their work, and to serve as a basis for raising awareness of Intellectual Property among Europe’s citizens.
The study is intended to provide results that are comparable to those obtained for the US economy. The methodology used here is therefore closely related to that used in the pioneering study published in March 2012 by the Economics and Statistics Administration in the US Department of Commerce and the United States Patent and Trademark Office (USPTO).
Main Results of the Study
IPR-intensive industries are defined as those having an above-average use of IPR per employee. The present study shows that about half of European industries can be considered IPR‑intensive. It should be emphasised, however, that all industries use IP rights to some extent. By focusing only on the IPR-intensive industries, this study arguably understates the real contribution of IP rights to the European economy.
Such IPR-intensive industries are shown to have generated almost 26% of all jobs in the EU during the period 2008-2010, with almost 21% in trade mark-intensive industries, 12% in design-intensive industries, 10% in patent-intensive industries, and smaller proportions in copyright-intensive and GI-intensive industries.6 On average over this period, 56.5 million Europeans were employed by IPR-intensive industries, out of a total employment of approximately 218 million. In addition, another 20 million jobs were generated in industries that supply goods and services to the IPR-intensive industries. Taking indirect jobs into account, the total number of IPR‑dependent jobs rises to just under 77 million (35.1%).
Over the same period, IPR-intensive industries generated almost 39% of total economic activity (GDP) in the EU, worth € 4.7 trillion. They also accounted for most of the EU’s trade with the rest of the world, with design-intensive, copyright-intensive and GI-intensive industries generating a trade surplus. IPR-intensive industries also pay significantly higher wages than other industries, with a wage premium of more than 40%. This is consistent with the fact that the value added per worker is higher in IPR-intensive industries than elsewhere in the economy.
In addition to their direct employment contribution, IPR-intensive industries also generate employment in other, non‑IPR-intensive industries which supply them with goods and services as inputs to their production processes. Using the EU27 Input Output Tables, published by Eurostat, it is possible to calculate this indirect effect on employment in non‑IPR‑intensive industries. The result is summarised in table 2, which shows a breakdown by direct and indirect employment. Including the indirect jobs in the calculation implies that 35.1% of EU jobs are contributed by the IPR-intensive industries, directly and indirectly.
Besides employment, IPR-intensive industries contribute to economic output, as measured by Gross Domestic Product (GDP). Overall, almost 39% of EU GDP is generated in IPR-intensive industries, with trade mark-intensive industries accounting for 34%, design-intensive industries for 13%, patent-intensive industries for 14% and copyright and GI-intensive industries for smaller proportions. Chapter 6 provides a more detailed breakdown of these industries’ contributions to the national economies of the EU Member States.
Comparing the results of this EU study with those for the US reveals that the two economies have a similar structure, as is to be expected given their similar level of development. However, in terms of the contribution of IPR-intensive industries, the shares in employment and GDP are somewhat higher in the EU: 26% vs. 19% for employment and 39% vs. 35% for GDP. However, in both studies, trade mark-intensive industries account for the highest shares in both employment and GDP, followed by patents and copyright in the US and by designs, patents and copyright in the EU. Similarly, the wage premiums in IPR-intensive industries compared to other industries are similar: 41% in the EU and 42% in the US, with copyright-intensive and patent intensive industries having the highest premiums on both sides of the Atlantic. Given that 39% of GDP (value added) in the economy and 26% of employment is generated in IPRintensive industries, the value added per employee is higher in IPR-intensive industries than in the rest of the economy. Economic theory suggests that, all else being equal, industries in which the average worker produces more value added can be expected to pay their workers higher wages than other industries. It is therefore of relevance to examine whether this higher value added is reflected in the relative wages in the IPR‑intensive industries.
Wages in IPR-intensive industries are indeed higher than in non-IPR‑intensive industries. The average weekly wage in IPR-intensive industries is € 715, compared with € 507 in non‑IPR‑intensive industries – a difference of 41%. This “wage premium” is 31% in design-intensive industries, 42% in trade mark-intensive industries, 46% in GI-intensive industries, 64% in patent-intensive industries and 69% in copyright-intensive industries.
Finally, the role played by IPR-intensive industries in the EU’s external trade is examined. The bulk of EU trade is in IPR-intensive industries. It may be somewhat surprising at first glance that such a high share of imports is IPR-intensive. This is because even industries producing commodities such as energy are IPR-intensive, while on the other hand, many non-IPR-intensive activities are also non-tradable. For that reason, 88% of EU imports consist of products of IPR-intensive industries.
However, an even higher share of EU exports, 90% is accounted for by IPR-intensive industries. The EU as a whole had a trade deficit of approximately €174 billion, or 1.4% of GDP. Since the IPR-intensive industries as a whole account for a higher share of EU exports than EU imports, they make a positive contribution to the Union’s trade position. The EU has a trade deficit in trademark-intensive and patent-intensive products, to some degree offset by trade surpluses in copyright intensive, design-intensive, and GI-intensive industries.
Policy Implications as Stated By Author
It makes no policy recommendations, as this is not within its scope. Instead, it is designed to provide evidence that can be used by policymakers in their work, and to serve as a basis for raising awareness of Intellectual Property among Europe’s citizens.
Coverage of Study
|Level of aggregation:||IPR-intensive industries|
|Period of material under study:||2010|