EUIPO-EPO Joint Report Finds IP-Driven Industries Contribute Nearly Half of EU GDP, One-Third of Total Jobs

On Thursday, the European Union Intellectual Property Office (EUIPO) and the European Patent Office (EPO) issued a joint report on IP and innovation in various industrial sectors of the European economy. Identifying IP-driven industries by analyzing registrations for IP rights within the EU, the agencies conclude that such industries contribute nearly half of the entire European gross domestic product (GDP) while also providing a third of the EU’s jobs, which offer workers larger wages on average when compared to total EU employment.

Trademark-Intensive Industries Account for Greatest Share of IP’s Value to EU GDP

In a study of 361 IP-driven industries and their economic impacts on the EU between 2021 and 2023, the EUIPO and EPO found that sectors in which companies enjoy above-average ownership of IP rights per employee contributed €7.7 trillion to the EU’s GDP over the two-year study period. Among different forms of IP rights, trademark-intensive industries contributed 39.1%, the largest share of the total value tracked during the study, followed by patent-intensive industries (18.4%) and design-intensive industries (16.1%). Other forms of IP rights tracked by this study include copyright, geographical indication and plant variety rights.

The top industrial sector for the core IP rights of patents, trademarks and designs were IP leasing entities, which also led the way in registrations per employee for plant variety rights. Trademark-intensive industries also saw IP registrations driven by transport equipment manufacturers, fermented beverage distillers and trusts and other funds, while patent-intensive industries were led by power-driven hand tool manufacturers, communication equipment manufacturers and electric domestic appliance manufacturers. Design-intensive industries also saw registrations driven by transport equipment manufacturers along with furniture and carpet wholesalers and jewelry makers.

More than 65 million people are employed by IP-driven industries, nearly one-third of the EU’s total workforce, and the EUIPO-EPO joint study concludes that workers employed in such industries enjoy an average wage premium of 40.9% over workers in other industries. IP-driven industries have also been increasing their share of EU’s total employment numbers, accounting for 30.6% of all jobs in the EU compared to 30.1% during 2017 to 2019. As the study’s executive summary points out, larger wages for employees in these creative industries are consistent with the fact that IP-driven industries contribute more value added per worker.

IP-Intensive Startups Attract Nearly 90% of Venture Capital Funding During Study Period

Intellectual property rights also drive international trade going out from the EU with IP-driven industries accounting for 78.3% of EU exports. While the EU also imports a great deal of goods and services from such industries, it also enjoys a trade surplus of €108 billion thanks to the value of the EU’s IP-related exports. While IP rights help the functioning of the EU’s internal market, aiding in the creation of 7.2 million jobs in EU member states from companies elsewhere within the EU, IP-driven industries contribute 63% of the value of total EU exports, an even higher share than they contribute to EU GDP, and supports the employment of just over half of the EU’s export-related workforce.

Venture capital is critical to the ability of startups to scale their operations upward and the EU’s IP agencies found that 88% of startup investment funding during the study period, about €70.7 billion, went to companies operating in IP-driven industries. Though investments in these companies face risk, the joint report’s findings support the idea that investors actively channel funds to IP-intensive startups in return for superior rewards compared to non-IP-intensive startups.

This recent EUIPO-EPO study updates several findings from the last joint report on IP-intensive industries and EU economic performance issued by the agencies in 2022. Along with supporting a larger percentage of the EU’s workforce, IP-driven industries also increased their contribution to EU overall GDP from 47.8% up slightly to 47.9% between study periods. The study notes that key contributors to the value added in IP-intensive industries are drugmakers, electronic component manufacturers and electricity producers.

The EUIPO-EPO report on IP-driven industries also provides a significant bookend to another recent study jointly released by the EUIPO and the Organisation for Economic Co-operation and Development (OECD) on counterfeits and labor exploitation. In that study, the EUIPO and OECD concluded that modern slavery and labor abuse, far from being a byproduct of counterfeit trade, structurally supports the global trade in fakes and is reinforced by the weak rule of law allowing illicit trade to continue. By contrast, the EUIPO-EPO report shows that protections under law afforded by IP rights support jobs offering higher quality of living due to the increasing value of intellectual property.