Study - Intellectual Property and the Impact on Company Growth

Guess how much growth you can achieve in case you invest in trademarks, designs, patents etc.?

Just recently this year in 2019, the European Union Intellectual Property Office (EUIPO) and the European Patent Office (EPO) released a joint study, which examines the relationship between the growth prospects of European small and medium-sized enterprises (SMEs) and their IP activity.

SME, Intellectual Property and Company Growth

The new EPO/EUIPO joint study shows that companies that make more frequent use of intellectual property rights (IPRs) are more likely to grow and become high-growth firms (HGFs) than those who do not. It further examines the particular way in which HGFs shape their IPRs strategies prior to experiencing high growth.

According to the study SMEs are a fundamental pillar of the European economy, they contribute 57% of the EU’s Gross Domestic Product (GDP); a large proportion of that value is generated from high-growth SMEs. Those high-growth SMEs are defined as those that experienced an annual growth of at least 20% for over three consecutive years.

The study shows that SMEs that file at least for one IP right are 21% more likely to experience a growth period and 10% more likely to become a HGF than those who do not. Moreover the study reveals that SMEs that apply for IP rights at European level have an even greater likelihood of 17% of becoming a HGF. Furthermore the study emphasizes the chance of an SME to become a HGF increases by 33% if they uses “bundles” of trademarks, designs and patents instead of one single IP right category.

The study also analyzes the IP activity as a leading indicator of an SME’s future growth and identifies the type of IP assets that support that success in different industry sectors: the study states that SMEs in low-tech industries that have filed a European Patent are 172% more likely to experience high growth, in high-tech industries the figure is 110%.

The report concludes that patent protection especially matters to SMEs, because they can secure higher margins, license technology, establish collaboration, attract customers and also compete with larger established enterprises.

The full report can be found here. For more information how to protect and develop an IPR strategy, please contact us via email at: info@lexdellmeier.com.