A new study confirms that European Union enterprises owning intellectual property rights generate higher revenues per employee, create more employment and pay higher wages than enterprises with no IP portfolio. The difference in performance is particularly strong among small and medium-sized enterprises and among holders of registered design rights.

Intellectual Property Rights and Firm Performance in the European Union is a newly published study, produced jointly by the European Patent Office and the European Union Intellectual Property Office, that examines the relationship between companies’ ownership of intellectual property rights (IPRs)and their economic performance.

Data and methodology

The study is based on the analysis of an impressive amount of data from 119 thousand companies from the EU’s 27 member states covering the 2013-2022 decade; the IPRs considered are patents (national and European), trademarks (national and European Union) and designs (national or registered community designs).

The final dataset contains information extracted from IPR registers and matched with data from ORBIS, a commercial database that draws upon the obligatory accounting information provided by millions of European companies to the commercial registers of their countries.

For several reasons, including differences in accounting practices between countries, revenue per employee (RPE) is the main indicator of company performance chosen for this publication.

Key findings

Employment

IPR owners employ on average more workers than firms that do not own IPRs. The disparity in employment can be as much as 4 times more workers, and interestingly it is most notable in the case of owners of registered Community designs.

Revenue per employee

RPE favours IPR owners over non-owners by almost 24%. It is highest among design owners (29.3%), closely followed by patent owners (28.7%) and trade mark owners (23.3%). The difference is considerably higher among companies with European-level IP rights compared to those with national-level IP rights. Such  difference is highest in the case of trademarks: EU trade mark owners enjoy a RPE that is double that of national trademark owners.

The above RPE figures are those based on the “raw data”; however, after correcting for relevant factors such as country of origin, size and sector of activity, RPE turns out to be on average 41% higher for IPR-owning enterprises of all sizes.

Salaries

IPR-owning employers pay better salaries on average by 22%, with the highest salaries being paid by patent owners (43.3%), design owners (24.8%) and trademark owners (20.9%).

SMEs reap highest benefits from IPR ownership

In the case of SMEs, RPE rises on average by 44% for IPR owners compared to non-IPR owning peers, while in the case of large companies the average difference is 16%. For SMEs the highest RPE premium is related to the combined ownership of patents, trademarks and designs (51%) and to the ownership of trademarks (47%). For large companies, the combination of patents and design ownership is related to a +51% RPE, and the combination of patents, trademark and design ownership to a 27% RPE.

The study certainly provides interesting insights data and confirming, albeit empirically, the critical role played by intellectual property in driving European competitiveness, wage growth and innovation; it also indicates that efforts by European policy makers and institutions must increase to make IPRs more easily available to all enterprises and especially to the European Union’s SMEs, less than 10% of which hold any kind of IPR.

Information

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