Authored by: Jeremy de Beer
Abstract: Governments have long been interested in making intellectual property (IP) policy based on sound evidence. There is a large body of literature addressing the economic impacts of IP, but little of it is accessible to policymakers. This article aims to improve understanding of how IP contributes to the economic performance of a country’s innovative sectors. A detailed literature review and meta-analysis identifies existing methodologies and analytical frameworks. The article organizes the literature and conclusions into four major archetypes, and explains the advantages/disadvantages of each approach. First, data for advocacy is used primarily by special-interest lobby groups. This literature is accessible to policy-makers, but rarely transparent, verified, or peer reviewed. Second, valuations of aggregate economic contributions of IP-related industries are influential worldwide. This literature usefully allows us to compare data internationally, but makes unfounded or misleading assumptions about the importance of IP to a particular industry. Third, innovation indices and rankings are increasingly used to assess comparative progress over time. This literature reports on a broad-base of IP and innovative activity, but risks turning into a statistical horserace. Fourth, the literature on scholarly theoretical and empirical research and modeling is extensive. This literature often relies on sound evidence, but tends to use the ‘available information’ – patent data – without explaining the context in which firms may or may not choose to use formal IPRs. It is also rarely accessible to policymakers in the format or timelines required. None of these frameworks alone are fully capable of providing complete, reliable information about the economic importance of intellectual property in any one particular country, and explain why. An approach that positions and integrates various frameworks, methods and data sources is, therefore, appropriate. The key challenge for the future is to connect empirical data and micro-economic analyses about firms’ strategic responses to IP policy changes with statistics and macro-economic insights on overall economic performance or social welfare.