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Home page  About CSIS Programs Technology and Public Policy Intellectual Property and Innovation Growth of IP in Trade
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Growth of IP in Trade
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Quantitative Measures. IP is inherently difficult to value. Moreover, IP is accounted for differently in different countries accounting practices. IP’s value may change depending on the owner or user’s ability to exploit its value in the marketplace. Nonetheless, there is growing appreciation of IP’s role in trade and products globally and there have been some estimates that attempt to quantify that role.
WIPO estimates are that intellectual property accounted for $3 trillion in global trade in 2005, and expects that to double to more than $6 trillion by 2020. The creative industries are growing faster than any other sector according to WIPO. In 2003, the total asset value of patents worldwide was estimated to be over $1 trillion. Another estimated suggested that the value of total global intellectual property is between $4 trillion and $7 trillion. In the US, a 2005 report estimated that IP contributes 9.2 percent of US GDP. The market value of all US equities in 2005 was $15 trillion of which intellectual capital was estimated to make up about $5 to $5.5 trillion.
One method for measuring the growth in IP’s value is to use global licensing and the expansion of royalty-based revenue as a proxy. The chart below shows worldwide royalties since 1980 ($10.8 billion) to 2004 (over $109 billion). There was a particularly rapid rise between 1990 and 2000 when royalty receipts increased almost three-fold from $27.4 billion to over $79 billion.
Ernst & Young has said revenue from patent licensing is to reach $500 billion by 2015.
Figure Source: CSIS, Based on World Bank Development Indicators data.
Royalty and licensing fee receipts correlate strongly with world GDP growth (0.97), but the trend in the rate of fee receipt growth is even more steadily upward over the same period.
The following graph shows how this breaks down relative to economic standing.
Figure Source: Kamal Saggi, “Technology Transfer and the Role of Intellectual Property Rights,” Presentation at the WTO, October 11, 2005.
i http://www.ip-watch.org/weblog/index.php?p=211&res=1024&print=0
ii Ronald Borod, “Update on Intellectual Property Securitization,” Journal of Structured and Project Finance, January 1, 2005.
iii http://www.buildingipvalue.com/06Global/063_066.htm
iv Ibid.
v Red Herring, July 2006. |
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