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Report  | January 2011

Employment and Gross Output of Intellectual Property Companies in the United States

By Nam D. Pham, Ph.D.

Innovation is a key determinant of the global competitiveness of American businesses. IP companies are those who produce intellectual property (IP) or who apply IP in producing their goods and services. IP companies contribute substantially to U.S. output and employment and generate a large number of well-paying jobs for both white- and blue-collar workers. Based on the latest U.S. offi cial data, we estimate that, in 2008, IP companies in manufacturing and nonmanufacturing sectors employed more than 19 million workers and accounted for 16.3 percent of U.S. employment. In the same year, IP companies generated about $7.7 trillion in gross output, accounting for 33.1 percent of U.S. gross output. The innovation emanating from these companies is a key driver of sustained long-term economic growth and productivity, which are especially important in light of the current sluggish economic recovery and high unemployment. Given their important role in generating jobs and output, U.S. policymakers should give top priority to protecting and nurturing companies and their intellectual property.