Study: Intellectual Property Creates, Fuels High-Paying Jobs

WASHINGTON, April 29, 2010 – The Global Intellectual Property Center, an affiliate of the U.S. Chamber of Commerce, this week released a study examining the affects of intellectual property on American jobs between 2000 and 2007.

The study, conducted by Nam Pham of NBP Consulting, says sectors of the economy depending on IP are responsible for creating more and higher-paying jobs, sustaining economic growth and reducing the trade deficit.

The GIPC study identified 15 “IP-intensive” sectors, or those showing per-employee research and development spending exceeds the national average.

Compared to the 12 designated non IP-intensive, the IP-intensive sectors paid higher wages, added more new jobs and invested more in R&D and capital expenditures. Additionally, products of IP-intensive industries make up approximately 60 percent of U.S. exports.

The higher wages enjoyed by employees in IP-intensive sectors go to both white- and blue-collar workers. While IP-intensive sector salaries are 60 percent higher overall, low-skilled workers’ salaries are 40 percent higher.

Pham presented the study on Monday morning, along with Miriam Sapiro, deputy U.S. Trade Representative; Stanford McCoy, assistant USTR for IP and innovation; and Mark Esper, executive vice president of GIPC.

The panelists presented the findings as a testament to the importance of a strong IP enforcement regime, and urged the United States to adopt stronger IP enforcement policies to spur innovation and create more U.S. jobs.

The study quotes a figure of $53 billion lost to software piracy in 2008 alone, and claims that the costs of IP infringement may reach $1 trillion in the next several years. According to the IDC, whose numbers GIPC quotes, a 10 percent reduction in software piracy would create over 32,000 jobs and add $41 billion to the U.S. gross domestic product.

A recent report from the Government Accountability Office calls those claims into question. The report, on quantifying the effects of piracy and counterfeit goods, emphasizes that infringement has costs, but asserts that the lack of reliable data makes it extremely difficult to quantify the effects.

Attempts generally rely on studies whose data and methods are kept tightly guarded; the GAO found that the numbers often quoted could not be substantiated. The secretive nature of infringing activity, the difficulty of valuing the losses, and the inability to quantify the positive effects make a credible figure nearly impossible to obtain.

The Computer and Communications Industry Association, Consumer Electronics Association, Public Knowledge and Electronic Frontier Foundation signed on to a full-page ad in Monday’s Roll Call newspaper criticizing its reliance on figures called into question by the GAO report.

The GIPC study makes the case that IP-intensive industries are driving economic growth and creating jobs even during economic downturns.

Knowledge is driving the economy of the 21st century. But the U.S. Chamber also says that stronger enforcement would lead to more growth—a connection that is not made clear.

CCIA released its own competing study on Tuesday, detailing the affects of fair use and other copyright limitations on the U.S. economy. A number of these types of studies are being released as USTR is negotiating with its foreign counterparts over the Anti-Counterfeiting Trade Agreement, a controversial plurilateral trade agreement seeking to ramp up enforcement against intellectual property violations in member countries.