Monday 22 June 2015

More figures on IP and competitiveness from the EU Observatory -- but what do they mean?

A recent media release from the Office for Harmonisation in the Internal Market (OHIM) has been busily trumpeting the correlation between economic performance and ownership of IP rights. It reads, in relevant part, as follows:
"New study finds that companies owning Intellectual Property rights outshine their competitors in economic performance
Companies owning intellectual property rights (IPRs) have, in general, 29% higher revenue per employee, about six times as many employees and pay wages that are up to 20% higher than firms which do not own IPRs. 

These are the main findings of a study carried out by  ... OHIM acting through the EU Observatory on Infringements of Intellectual Property Rights.

The study, which is based on official public financial data from more than 2.3 million European firms, covers companies which own patents, trade marks and designs at both national and EU level. 

One of the key findings in the study is that a modest share of small and medium sized enterprises (SMEs) in Europe own patents, trade marks or designs. It also finds that those SMEs which own such rights have almost 32% higher revenue per employee – a significantly higher economic performance, showing significant relative benefits associated with the ownership of IPRs. SMEs are companies which employ fewer than 250 people and which have an annual turnover not exceeding 50 million euro. 
This report, which looks at the contribution of IPRs at a company level, is a follow-up to a first EU-wide analysis of the contribution of IPR intensive industries to economic performance and employment in the European Union. 

It found that about 40% of total economic activity in the EU (some €4.7 trillion annually) is generated by IPR-intensive industries, and approximately 35% of all employment in the EU (77 million jobs) stems directly or indirectly from industries that have a higher-than-average use of IP rights".
The report, Intellectual property rights and firm performance in Europe: an economic analysis (here) was published earlier this month.  The previous report, Intellectual property rights intensive industries: contribution to economic performance and employment in the European Union (here), was published in September 2013. 

Headlines and figures are great fun, but one still has to look beyond them and ask which of the following propositions they support:

  • Businesses outperform their competitors because they have intellectual property
  • Businesses have intellectual property because they have outperformed their competitors
  • Businesses that outperform their competitors because they have intellectual property continue to outperform their competitors by acquiring further intellectual property

... or anything else, for that matter.

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