Copyright's contribution to the US economy: rosy figures, this time round

Thanks to Chris Torrero, my attention has been drawn to "Copyright Industries in the U.S. Economy", a report prepared by the International Intellectual Property Alliance (IIPA) which has, since 1984, been working in partnership with the U.S. government to improve the ability of the copyright industries to do business in foreign markets. Quoting directly from the preface to this report:

"To quantify the contribution of the copyright industries, IIPA commenced a series of economic studies in 1990. Copyright Industries in the U.S. Economy: The 2013 Report, the fourteenth such report, by Stephen E. Siwek of Economists Incorporated, covers the period 2009-2012. This Report shows that the copyright industries make up an increasingly large percentage of value added to GDP; create more and better-paying jobs; grow faster than the rest of the U.S. economy; and contribute substantially to U.S. foreign sales and exports, outpacing many industry sectors. The specific findings of this year’s Report mark a milestone: for the first time, the contribution of the core copyright industries of the U.S. economy surpassed one trillion dollars in 2012".

The report can be accessed in full here.

This blogger is generally quite sceptical of reports and studies that purport to measure the value of copyright industries, partly because of the definitional issues involved and partly because of the risk of double-accounting.  However, where there is a series of reports as is the case here, comparisons between different editions can be quite meaningful.  The period 2009-2012 is perhaps one that should be treated carefully, since it coincides with the astonishing growth of online transactions concerning copyright works at the same time as many non-IP sectors contracted or stagnated in the wake of the US banking crises, sub-prime lending scandals and so on.  Now that a global recovery is gradually manifesting itself, the next set of figures from the IIPA report might show a handsome contribution of copyright industries to the US economy in dollars and cents but a far weaker showing in terms of percentage contributions.

The role of branding in the UK economy

Last month the British Brands Group announced that it had commissioned Westminster Business School to undertake a study into the economic contribution of branding to the UK, to help build understanding of the wealth it generates and to quantify the contribution it makes to the economic health of the country. This work is seen as an essential precursor to assessing whether this contribution is being maximised. Its key findings are as follows: 

• An estimated 1 million people are employed in the UK in the creation and management of brands, equivalent to 4% of all those employed;

• The value of branding to companies is well understood. The most valuable brand domiciled in the UK is HSBC ($33,742 million), followed by Vodafone ($26,688);

• Brands are simply not being counted in the UK’s measures of economic activity. The knowledge economy is not being valued, and branding is an important element of this;

• While brands are recognised as a driver of economic growth, there remain significant gaps in the evidence base;

• Approximatetly £32.55 billion is spent on building brand equity annually, or 2.3% of GDP;

• This represents some £15.8 billion investment in the UK annually. This represents around 12% of all intangible investment and 6% of all investment in the UK;

• The creation and management of brands is becoming an increasingly important component of the UK’s overseas earnings;

• The investment in building a strong trust relationship between firm and consumer yields a number of returns to the wider economy:
- providing a surety that new products, ventures or markets are “safe” for consumers;
- the quicker adoption of new technologies and ways of living and working;
- aligning business with society, allowing firms to offset side effects of consumption;
- a means of regulating large global firms with extensive influence;
- a spur to innovation as companies strive to maintain their reputational asset;
- enhancing the reputation of British products and services abroad, supporting exports.

The BBG comments that it surprising how little work has been done so far to assess the contribution of branding to the wider UK economy, which is reflected by the significant gaps that exist in the evidence base. With branding’s potential to add value, deliver competitive  advantage, commercialise innovation, protect consumers, contribute to GDP, enhance export performance and align business to societal needs, this seems at best an anomaly and at worst a significant oversight.

A full copy of this 51-page report can be downloaded here.