Industries that make strong use of intellectual property protection make up over 40 percent of U.S. GDP and tend to have better-paid workers than other industries, but gaps remain in their representation of women and minorities. Those key takeaways come from a new U.S. Patent and Trademark Office (USPTO) report that examines industries with intensive use of patents, trademarks and copyrights.
The report looked at more than 125 industries in sectors that are IP-intensive. These included manufacturing; wholesale and retail trade; and professional, technical, management, and administrative services. It found that when accounting for direct and indirect employment, those industries accounted for 44 percent of U.S. employment. Furthermore, workers in IP-intensive industries earned more money than those in other industries - an earnings premium of 60 percent weekly. For this and other reasons, we at Greensfelder have coined the phrase "IP - Connected to Everything.®"
"Intellectual property protection is vital for American innovation and entrepreneurship," Secretary of Commerce Gina Raimondo said in a USPTO news release. "This report underscores the key benefits associated with a strong intellectual property system."
It has been estimated that $21 trillion in U.S. intangible assets is 84 percent of S&P 500 value, including IP rights and reputation. For S&P 500 companies in 2018, tangibles such as real estate and equipment comprised just 16 percent of company value, while intangibles, such as IP rights and reputation, made up 84 percent. Although the top-tier companies have changed, this has been the trend since the mid-1990s. The same percentages apply for most mid-cap and smaller companies.
Every company needs to ask the question: What are you doing to protect and enforce your IP rights? If you can't readily answer that question and explain why, you should have someone assist you in developing a Business Case Driven IP StrategyTM. It may be the differentiator between you and your competitors.
Gaps in Diversity
This year's USPTO report also puts a new focus on studying the demographics of the workers in IP-intensive industries. It found that women and people of color were frequently under-represented. For example:
- Women made up about 44 percent of the workforce in IP-intensive industries, compared to 54 percent in other industries.
- Black workers comprise about 9 percent of the workforce in IP-intensive industries, and 14 percent in other industries.
- Hispanic workers were represented at about 13 percent of the IP-intensive industry workforce, versus 20 percent in others.
A previous USPTO report revealed that they estimate a gender gap, showing that only 12.8 percent of all inventor-patentees are women and Black and Hispanic inventors each only represent 1 percent. Further, the patent bar itself lacks diversity. While it has been estimated that women make up about 37 percent of attorneys in the U.S., only about 10 percent to 15 percent of registered patent attorneys are women. It is estimated that of the USPTO registered patent attorneys, only about 6.5 percent are diverse racially. Therefore, while intellectual property could be considered an industry in and of itself, it is not a very diverse one.
The USPTO report's demographic data is significant because it highlights for those industries the need for equal access and participation in order to spur further innovation.
The full report is available at https://www.uspto.gov/sites/default/files/documents/uspto-ip-us-economy-third-edition.pdf. Previous editions of the report were published in 2012 and 2016.
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