April 16, 2012

State of Alabama
Press Release: Alabama Department of Commerce

Patents, Copyrights Boost Economy With Jobs, Report Finds

April 12, 2012

U.S. Chamber of Commerce's Small Business Nation


By William McQuillen and Brian Wingfield

More than a quarter of all jobs in the U.S. are with companies that rely on patents, copyrights and trademarks to protect products from competition and promote investment, the Commerce Department said.

About 27.1 million jobs in 2010 were in industries that rely heavily on intellectual property protections, and another 12.9 million positions were indirectly affected. The 75 industries deemed “IP-intensive” accounted for $5.06 trillion, or about 35 percent of the gross domestic product in 2010, according to a study released today by the Economics and Statistics Administration and U.S. Patent and Trademark Office.

The Commerce Department sought to quantify the portion of the U.S. economy relying on intellectual property rights as President Barack Obama calls for more innovation to boost job growth. Workers in industries deemed intellectual property intensive earned $1,156 a week on average in 2010, 42 percent more than those in other sectors, the report found.

“These good-paying jobs help support an economic security for America’s middle class,” Rebecca Blank, deputy Commerce secretary, said today on a conference call with reporters.

While almost all companies rely on some intellectual property, such as the trademark for their name, the study selected 75 that were considered more reliant, including makers of electronics, medical devices, software, drugs, motor vehicles, consumer goods and movies.

Jobs Growth
“The largest and most innovative industries in the U.S. rely on IP for global competitiveness,” said patent office Director David Kappos. Strong intellectual property protection is “paying dividends in growth of the economy and growth of jobs.”

The U.S. jobless rate was at 8.2 percent in March as Obama campaigns for a second term in November’s presidential election. A loss of manufacturing jobs has meant that employment in the patent-reliant industries fell, though there was rapid growth in jobs in areas such as software that rely more on copyright protection.

U.S. exports of merchandise from industries that are intensive in intellectual property, including electronics and chemicals, increased about 53 percent, to $775 billion, from 2000 to 2010, according to the report. They account for almost 61 percent of all U.S. goods exported.

Imports from industries intensive in intellectual property increased almost 62 percent during the past decade, to $1.34 billion in 2010.

Measuring Effect
“We must ensure that American IP-intensive industries remain confident that their copyrights, patents, and trademarks will be enforced,” Thomas Donohue, the president of the U.S. Chamber of Commerce, said at a White House event announcing the report.

Quantifying the economic contribution of intellectual property has been difficult, with a 2010 GAO report saying that it was impossible to measure the amount that pirated goods hurt the economy.

Trade statistics don’t capture the “complete picture” of the importance of some industries, such as electronics, to the U.S. economy, according to the report. For example, low-wage workers assemble iPhones abroad for Apple Inc. (AAPL), the Cupertino, California-based company that employs highly skilled workers in the U.S. and is a global leader in computer manufacturing, the report said.

The report took no policy positions, though Blank said it would be used in talks with China on its need to crack down on counterfeit goods.

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