IPR-intensive industries drive Europe’s economy, trade and startup funding

Industries that make intensive use of intellectual property rights (IPRs) are crucial to European competitiveness. They generated almost half of the European Union’s GDP during the period 2021-2023, as well as over 30% of all jobs in the EU and paying on average nearly 41% higher wages (for patent-intensive industries the wage premium is even higher at almost 59%). They also accounted for over 78% of EU exports and over 76% of imports. Some €70.7 billion in private equity and venture capital, over 88% of all such funding in the EU, was invested in startups operating in these industries.

A new study from the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) shows the significant impact that IPR-intensive industries have on GDP and job creation, as well as on cross-border trade and investment in the EU. These industries range from technology and healthcare companies that rely heavily on patents to clothing, food and luxury brands that rely on trade marks, as well as the creative industries around music, film and games that rely on copyright. The joint study – IP and innovation in European sectors – is the fifth in a series which, for over a decade, has quantified the importance of IPRs to the EU.

EPO President António Campinos said: “IPR-intensive industries are at the heart of Europe’s innovation and competitiveness. This study provides clear evidence of their powerful contribution to Europe’s economy, driving employment, attracting investment and strengthening trade. A strong and efficient intellectual property system, built on legally robust, high-quality patents, is essential to help innovators grow and succeed globally. At the EPO, we are fully committed to supporting technology-driven companies of all sizes, notably through simplification initiatives such as the Unitary Patent, to foster sustainable growth, jobs and competitiveness across Europe.”

EUIPO Executive Director João Negrão said: “Enhancing the role of IP rights as catalysts for innovation and growth in Europe is one of the key priorities in EUIPO’s Strategic Plan 2030. This report documents the important role they have in generating economic growth and employment today, and the critical function of IPR to enhance the competitiveness of EU businesses. By showing that the most innovative sectors attract the bulk of risk capital, the report also points towards the future in the context of addressing the objectives set out in the Draghi report. EUIPO will continue to work to promote the use of IP rights as a lever for innovative companies in Europe to access finance.”

Generating almost half of EU GDP and more than 30% of the EU’s jobs

This latest edition, covering 2021-2023, identifies 361 industries making intensive use of IPRs and together generating economic activity worth some €7.7 trillion per year on average, accounting for almost 48% of the EU’s GDP. Strong growth was seen in sectors such as pharmaceutical manufacturing, electronic component manufacturing, and electricity production.

The high productivity is reflected in wages, which are 40.9% above those in the rest of the EU economy. Moreover, 30.6% of all jobs in the EU are generated by IPR-intensive industries (up from 30.1% over the period 2017-2019). This means that sectors making intensive use of patents, trade marks or designs, among other IPRs, directly employed nearly 65.5 million people in the EU during the period covered by the new study. Patent-intensive industries alone accounted for over 25 million jobs.

Contribution of IPR-intensive industries to GDP and employment, 2021–2023 average

* Wage premium is the difference between average wages paid in IPR-intensive and non-IPR-intensive sectors.

Boosting EU trade and value chains

IPR‑intensive industries are far more trade‑oriented than other sectors, accounting for 76.4% of EU imports and 78.3% of exports to non‑EU countries, resulting in a €108 billion trade surplus. This consistently higher export intensity, particularly in patent-intensive industries, plays a central role in EU trade and competitiveness, generating 63% of total export-related value added, even exceeding their share in the EU GDP (48%).

Attracting most investment: the correlation between IPR intensity and financing intensity

For the first time, the study used data on startup funding, showing a strong and statistically significant positive correlation between IPR intensity and financing intensity. IPR‑intensive industries attract the vast majority of private equity and venture capital investment in the EU, with €70.7 billion – more than 88% of all such funding – flowing to startups in these sectors. Investors accept higher risk in the expectation of superior returns compared with less IPR‑intensive industries. Adequate financing is essential for scaling innovative ideas and bringing them to market, making this concentration of investment a key factor for Europe’s economic future.

Linking investors with technology startups

To help in the development and commercialisation of new breakthrough technologies, the EPO‘s Observatory on Patents and Technology has developed the Deep Tech Finder, making it possible to identify European startups with European patents. This free tool  combines business data and investment histories from over 11 000 investment-ready European startups, universities and public research organisations (PROs) with their respective patent applications or granted patents. Now also available as a mobile app, the tool includes filters for dozens of technologies and industries. The Deep Tech Finder therefore helps investors and potential partners find European startups with valuable inventions.