Intellectual Property: Powerhouse for Innovation and Economic Growth
August 21, 2012 |
Allen Dixon, CREATe’s IP Counsel, was the principal author for a report prepared by the ICC’s Commission on Intellectual Property that explores the role of intellectual property rights (IPR) in economies – both advanced and developing. The report analyzes the benefits that can be realized in five different areas if intellectual property is adequately protected. Here are some of the key points:
Benefits to the economy
- As economies get more advanced, their value will be increasingly dependent on intangible goods – including IP related to inventions, brands and other works. Strong IPR will help the firms in these ‘knowledge economies’ realize the full value of their products which will raise the national GDP and allow the firms to hire more employees.
- Robust IPR attracts foreign direct investment and promotes technology transfers to developing countries – which in turn, drives development and economic growth. An OECD study found that a 1% increase in the strength of patent protection correlates to a 2.8% increase in FDI.
- Numerous World Economic Forum (WEF) surveys have found that the level of intellectual property protection correlates with a country’s economic competitiveness.
- When companies know that their innovations will be protected, they have a market-based incentive to increase spending on Research & Development.
- IPR promotes the dissemination of new technologies – through publication and licensing agreements.
IPR helps firms monetize their innovations and grow
- As mentioned above, strong IPR protections will allow firms to realize the full value of their innovations.
- Trademarks and other intangible IP assets can substantially enhance a company’s market value. A 2010 Interbrand survey found that the value of IP in the brand alone for the top 10 brands world-wide exceeds $25 billion.
Helps small and medium enterprises
- When venture capitalists know that innovations created by small and medium sized enterprises can be protected, they are more likely to give them more money for R&D.
- “SMEs are more likely to apply for patents, trademarks and designs given their innovative potential when compared to enterprises.” This study found that, on average, SMEs filed 19% more patent applications, 49% more trademark applications and 109% more design-right applications per employee than their large-firm counterparts.
- IPR supports the development of a continuous stream of innovative, competitive products and services that benefit consumers.
- IPR (especially trademarks) promote consumer trust and protection against counterfeit and pirated goods.