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Statistics on the Value and Importance of Intellectual Property

By: Christopher Heer, Daryna Kutsyna | Last updated: August 15, 2018

How important is intellectual property?

Intellectual property is an economic driver in Canada, the U.S. and Europe:

  • 51% of Canada's economy is represented by knowledge-based industries; over time, Canada is becoming increasingly dependent on industries of intangible goods and industries propelled by research and development.
  • As of 2008, innovative property composed 31.2% of all intangible wealth in Canada, amounting to $47 billion; this proportion continues to grow as intangible industries expand and tangible industries experience little to no change.
  • IP industries account for over 1/3 of the total GDP of the U.S. and for almost ¾ of the U.S.'s exports; the value of America's intellectual property exceeds $5.8 trillion.
  • Intangible assets account for 70% of firm assets and over 70% of equity value in the United States; the figure is similar for other developed countries.
  • Intellectual-property intensive industries contribute 26% of the EU's employment and 39% of the EU's GDP; 90% of EU exports and 88% of EU imports consist of products manufactured in IPR-intensive industries.

Intellectual property helps workers and businesses:

  • There is a wage premium in intellectual property-intensive industries; it is highest for patent and copyright-intensive industries, but considerable for trademark-intensive industries; the wage premium can often exceed 30% when compared to average market wages.
  • The value of intellectual property for Fortune 500 Companies exceeds 65% on average, and exceeds 90% for certain companies within the group.
  • Among the most innovative firms in Canada (world-first innovation), the rate of acquiring intellectual property is over 90%.
  • Intellectual property can account for over 40% of the average business, and is often not reflected on their balance sheet.
  • However, 67% of U.S. companies own technological assets that they are failing to exploit and that are potentially eligible for intellectual property protections (valued up to $1 trillion).

How can obtaining patents help your business?

  • The quality of Canada's patents exceeds any other country in the G-7 except the U.S., with patents being extremely significant on the overall growth trend of knowledge industries.
  • Acquiring patents could help you attract quality talent: the patent sector is responsible for 1/5 of all jobs in Canada; companies who have applied for and been granted patents have been proven to have higher employment and wage rates compared to their industry counterparts.
  • Obtaining a patent can gear you toward global export: the patent sector in Canada is heavily oriented toward external markets; exports of intangible assets are highly valued across the world.
  • Getting a patent could help you stay in business: firms that applied for at least one patent have a 14% lower chance of exiting the market over a 5-year period than firms inactive with intellectual property rights, all other variables equal.

How can registering your trademarks help your business?

  • Trademarks are low cost intellectual property assets, and as such, an investment in a trademark is a worthwhile endeavor even for a very small firm.
  • Getting a trademark registration for your business or trade name could help you stay in business: applying for a trademark registration prolongs the lifespan of a firm by 6.6 years on average; applying for a renewal of a trademark registration further extends that lifespan; further, firms that applied for at least one trademark registration have a 16% lower chance of exiting the market over a 5-year period than firms inactive with intellectual property rights, all other variables equal.
  • Trademark registrations can increase your profits: the enhanced trademark protection granted by registering your trademarks raises firm profitability by 1.7% and firm value by 11.9%, relative to matched and industry year adjusted control firms; it is also proven that investors assign higher values to companies with larger trademark portfolios.
  • Trademark registrations can help you leverage firm assets, emphasize the importance of the trademark to insiders and outsiders, and improve the marketability of firm assets.
  • However, small firms are consistently behind on capitalizing on trademark benefits: only 30% of small firms have applied for trademark registrations, as compare to over 90% of large ones.