Strong link between growth of SMEs and their use of IP

That's according to a new study released today by the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO).

SMEs represent 99% of all businesses in the European Union (EU), and contribute 57% of the EU's Gross Domestic Product (GDP). However, a large proportion of the value generated by SMEs comes from a small number of high growth firms (HGFs), which are often very innovative.

Today's study shows that SMEs that have filed at least one IP right are 21% more likely to experience a growth period afterwards and are 10% more likely to become an HGF than firms without IP rights applications. SMEs that file for IP rights at European level have an even greater likelihood (17%) of becoming an HGF.

The research also reveals that the chances of an SME becoming an HGF increase by 33% if they use "bundles" of trade marks, patents, and designs instead of one single IP right category.

The Executive Director of EUIPO, Christian Archambeau, said:

"SMEs, and high growth firms in particular, are the heroes of the European economy, helping to drive innovation and value. Our report clearly shows the relationship between IP rights and high growth firms, in which trade marks, as well as other IP rights, have a crucial part to play. A SME that has recently registered at least one trade mark is 13% more likely to experience high growth in the future."

The President of the European Patent Office, António Campinos, said:

"Some 30% of EPO applicants are SMEs, entrepreneurs, universities or public research organisations so it is essential to continue facilitating their access to the European market in order to commercialise their inventions. It has a tremendous impact on growth and job creation, and public authorities at the European and national level should increase their efforts to support this goal."

The study found that in high-tech industries, SMEs that have filed a European patent are 110% more likely to experience high growth; in low-tech industries the figure is 172%.

High growth firms are defined as those that have had an average growth rate greater than 20% per year over three consecutive years, and who have at least 10 employees at the beginning of the growth period.