Research Paper

Understanding the role of IP protection in UK firms’ growth, productivity and innovation 1998-2016: Patents, trade marks and registered designs reconsidered.

ERC Research Paper No 90

Associated Themes
  • Innovation
  • Productivity and performance

Since the early 2000s, UK investment in ‘intangible’ or ‘knowledge assets’ has been greater than that for tangible assets. This emphasises the importance of knowledge assets and intellectual property (IP) as a source of competitive advantage and also the potential importance of IP protection. Based on new intellectual property (IP) protection histories for around 110,000 UK firms from 1995-2018, this paper examines the contribution of UK registered patents, trademarks and registered designs to growth, productivity and innovation outcomes. The analysis builds on prior research on the ‘appropriability problem’, which reflects the ease of imitation and the difficulty for firms to maximise the returns to their innovation investments. Our analysis emphasises the strong sectoral differences in the use of IP protection mechanisms, and for the most IP-intensive sectors, suggests a positive association between IP protection use and growth and productivity. We find strong causal registered design-to-innovation relationships but weaker patent-to-innovation and trade mark-to-innovation relationships. The results suggest the value of re-visiting a policy dialogue which is focussed on the patents-to-innovation relationship, but currently plays scant attention to the value of design and specifically registered designs.