A major research study commissioned by the UK Intellectual Property Office has found that companies with trade marks are more productive, innovative and show higher employment and turnover than those without.
There is a common assumption in innovation policy circles that firms in high cost production locations that do not innovate will lose market share to import competition, so jobs will move to producers in developing countries with lower labour costs. Domestic firms are encouraged to innovate and to obtain intellectual property assets to protect their innovations, so that they can sustain local employment and pay high wages.
The study, “Trade Mark Incentives”, demonstrates that employment is significantly higher in firms that are trade mark active and that firms engaged in trade mark and patent activity are offering higher average take home pay to their employees than other firms in their industry.
The benefit of innovation and the associated use of intellectual property flow through a number of channels. Process innovation lowers costs of production by raising efficiency and productivity and this ultimately lowers the price of the item under production. Product innovations see firms offering consumers new varieties of products. This is sometimes characterized as a general process of increasing product quality.
The study highlights that trade marking firms have a 21% higher productivity level; this should encourage domestic producers to compete on product quality and variety, rather than simply cost and price and to register ownership of their innovations using the intellectual property system.
