Study shows trademark use spurs econmic growth

A new study of the International Trademark Association (INTA) showed industries which intensively use trademarks contribute significantly to five major economies in the Association of Southeast Asian Nations (Asean) members. 

Specifically, based on data from 2012 to 2015, trademark-intensive industries within the Philippines generated a 17 percent direct contribution to the gross domestic product (GDP) and 41 percent indirect contribution to GDP, reflecting a direct correlation between trademark-intensive and non-trademark intensive industries.

The study “The Economic Contribution of Trademark-Intensive Industries in Indonesia, Malaysia, the Philippines, Singapore, and Thailand” indicated that trademark-intensive activities generate increased employment across sectors and added contributions to international trade.

Trademark-intensive industries are defined as those industries which file more trademarks than other industries–weighted against total employment in that industry.

The release of the report coincided with the 50th anniversary of the Asean, which has successfully grown to become the world’s seventh-largest market and home to the third-largest labor force over the last half century. INTA commissioned the report from Frontier Economics, an internationally recognized economics research firm. The study was the first to analyze the correlation between trademarks and their economic impact on contribution to GDP, share of exports, and employment in major markets of Southeast Asia.

In terms of employment, output, and value-added, workers’ share of the workforce represented 15 percent of total employment. Trademark-intensive industries in the Philippines comprised 47 percent of the country’s share of exports, including manufacturing of computers, and electronics and related equipment which accounted for around 40 percent of total manufacturing value added.

“We have been emphasizing the contribution of intellectual property (IP), including trademarks, to the country’s economic development,” noted Director General Josephine R. Santiago of the Intellectual Property Office of the Philippines.

“We welcome this evidence-based study by INTA because it shows that there is a correlation between trademarks and economic development based on hard data. We hope that with a National Intellectual Property Strategy, which will be completed next year, we can further engage our stakeholders in making better use of the trademark system and contribute to economic development,” she added.

INTA CEO Etienne Sanz de Acedo said the results of the new study “underscore the immense potential for cross-sectoral economic growth that can be unlocked by promoting the value of trademarks with the business community, government, and the general public, and by further developing national trademark systems and trademark-intensive industries.”

“As we explore the long-term economic and social implications of trademarks and related intellectual property rights, it becomes increasingly important for both public and private sectors to scale up engagement on this issue, as well as support government efforts to further trademark and brand development and protection, including protection of goods in transit,” he added.

Building on similar methodologies used by the European Union Intellectual Property Office (EUIPO) and the United States Patent and Trademark Office (USPTO), findings from the Asean report echo emerging analytical trends with regard to trademark-intensive activity.

In the European Union, from 2011 to 2013, IP-intensive industries in Europe generated more than 42 percent of total economic activity; trademark-intensive industries alone produced 36 percent (worth 4.8 trillion euro) of that activity and generated nearly 46 million jobs (21 percent).

A similar study conducted by the USPTO also found that IP-intensive industries continue to be a major, integral, and growing part of the U.S. economy.

In 2014, trademark-intensive industries accounted for 23.7 million jobs in the U.S. In Latin America, according to a recent study commissioned by INTA of trademark-intensive industries in Chile, Colombia, Panama, Peru, and Mexico, from 2010 to 2014, their contribution to GDP varied between 10 percent and 21 percent, and workers’ share of the workforce ranged from 8 percent to 26 percent of total employment.

The study showed in all of the five economies, manufacturing is the dominant force in trademark-intensive activities. Though in the case of Singapore, this dominance is less pronounced, with trademark-intensive services (notably wholesale and retail services) accounting for close to the same share of overall value added (22 percent versus 26 percent for manufacturing).

In four of the five economies (Indonesia being the exception), computer, electronics and related equipment constitute the main industry within manufacturing.

This is, in part at least, a reflection of patterns of specialisation in international trade, and specifically the role of these countries within the cross-border value chains that have come to be such a prominent feature of computer and electronics manufacturing. In Indonesia, food products are the main trademark-intensive manufacturing category, according to the study.

In four of the five economies, the study showed a strong export orientation on the part of trademark-intensive activities, which in Malaysia, Singapore and Thailand directly or indirectly account for the majority of exports by value, and close to half the value of exports in the Philippines.

This is consistent with the prominent role played by industries, such as computer and electronic manufacturing, which are heavily integrated into international supply chains.

The study also revealed that food and beverage sectors, which play a relatively greater role in Indonesia, by contrast, tend to more oriented towards domestic markets; indeed, part of the rationale for brands to establish production facilities in a location is to adapt to local market tastes.

Measuring the share of trademark-intensive industries in total employment is complicated by data availability concerning the informal sector, especially in Thailand, Philippines, and Indonesia.