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SMEs that make use of IP are more likely to become high-growth firms

SMEs that have filed at least one IPR are 21% more likely to experience a growth period, and 10% more likely to become a HGF, compared to those that do not.

These are the conclusions of the recent study “High Growth Firms and Intellectual Property Rights“, published by the European Patent Office and the Intellectual Property Office of the European Union, which assesses whether SMEs that make more frequent use of IPRs are more likely to become high growth companies.

The main conclusions of the report state that:

  • SMEs with prior IPR activities are more likely to grow than other SMEs. SMEs that have filed at least one IPR are 21% more likely to experience a subsequent growth period, and 10% more likely to become HGF. The likelihood of experiencing a high growth period is 9% higher for SMEs that have filed at least one patent, and 13% higher for those that have filed a least one trademark.
  • The likelihood of becoming an HGF is 17% higher for SMEs that have filed at least one European IPR.
  • In high-tech industries, the likelihood of high growth is 110% higher for SMEs that have filed one or more European patents.
  • In consumer non-durable industries, SMEs are 62% more likely to experience high growth if they have filed a European trademark. However, the filing of a national trademark is better predictor (+49%) of the likelihood of high growth in consumer durable industries.
  • SMEs that use bundles of trademarks, patents and designs instead of a single category of IPR are even more likely to achieve high growth. IP bundles involving trademarks systematically outperform other bundles and single IPR categories, thus suggesting that trademarks are the basic building block of effective IP bundles.

 

According to the study, patents, trademarks and registered designs can be essential for innovative SMEs to appropriate the value of their ideas and ensure a return on their investments in intangible assets. Small companies can take advantage of IPRs to secure higher margins, authorize technology, establish partnerships and attract investors. They can also rely on the protection of IPRs in foreign markets to expand their activities and compete, in those markets, with large established firms.

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