The Importance of IP-Intensive Manufacturing Industries to the U.S. Economy

Abstract

Recently updated R&D and economic performance data once again confirm the crucial contributions of innovation to productivity and long-term economic growth, while reinforcing the importance of protecting intellectual property (IP) to innovation. IP-intensive (or “innovative”) industries continue to commit more resources to R&D and outperform non-IP-intensive industries across key economic measures. Workers in innovative industries punch well above their weight, creating more economic value and, accordingly, earning higher wages than their counterparts in other manufacturing industries. Firms in IP-intensive industries cut fewer jobs during economic contractions and add more jobs during economic expansions than their counterparts in non-IP-intensive industries. Given the well-established relationship between R&D and innovation and between innovation and economic growth, public policies should continue to underpin this IP ecosystem by ensuring the preservation of robust IP protections.