Innovation and the next great recovery

Post-World War II was a time of great innovation and creativity. Necessity truly was the mother of invention as Americans set out to rebuild Europe and improve their own quality of life. The development of new technologies revolutionized the workplace and home, and advances in medicine and other fields changed how we live.

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Creative industries thrived with the growth and spread of American culture. This innovation renaissance not only improved lives and human progress, but it created jobs — millions of jobs — that kept growing as these advancements defined America.

Intellectual property (IP), what most people understand as simple ideas or creations of the mind, played a key role in this economic and social transformation. The legal rights that governed IP for generations provided a known system of incentives that both fostered and spread innovation. It was the inducements built into our free-enterprise system, coupled with the talents and hard work of entrepreneurs, which moved this nation forward. It worked back then, and it will work now.

Six decades later, nearly half the U.S. economy is driven by industries that depend heavily on intellectual property rights. If we are to jumpstart a second economic renaissance, then we must begin by protecting and stimulating the lifeblood of America’s economy: its ideas.

This week, the U.S. Chamber of Commerce’s Global Intellectual Property Center —whose mission is to champion IP — is hosting its sixth annual IP Summit. Jobs are the issue of the day as speakers from a wide array of IP-intensive industries, along with members of Congress and senior administration officials, discuss how protecting and promoting strong IP rights in the U.S. can lead to economic transformation.

The counterfeiting and piracy of American goods cost the U.S. economy over $200 billion annually, and the loss of hundreds of thousands of jobs. This growing problem, coupled with the fact that some foreign governments are working to weaken IP laws that protect American patents, threatens to slow down innovation by undermining the incentives that foster it.

This is occurring at a time when industries that rely on IP, such as pharmaceuticals, IT, and entertainment, employ 18 million Americans, and are expected to exceed the national average when it comes to future job growth. At the same time, workers in IP-based industries are projected to earn approximately $7,000 more than their counterparts in non-IP lines of work.

In short, America’s future depends on intellectual property. Our IP is valued at over $5 trillion — more than the GDP of any other country. Intellectual property also accounts for more than half of all U.S. exports, helping drive 40 percent of U.S. economic growth.  In 2006 alone, IP exports contributed $37 billion to our trade balance, demonstrating the power of IP in the global marketplace.

In every state in the union, IP has played an integral role in molding the economy. Take President Obama’s home state of Illinois, for instance. Illinois is ranked sixth in the nation for patents, and creative industries have contributed to over $1 billion in local wages. It is home to 144 university-based and 71 federal research centers, and features eight premier research and technology parks that grow the high-tech companies and jobs of the future.

In Texas, 2007-’08 film production contributed to $1.7 billion in local wages, and the computer and video game industry employs over 7,600 people, adding $395 million to the state economy. Colorado, meanwhile, boasts the second-largest aerospace industry in the nation, employing over 350,000 people. And in Florida, the innovative economy supports 20,000 doctoral scientists and engineers and more than 276,000 high-tech workers, making Florida the fourth in the nation in terms of high-tech employment.

Intellectual property is woven into the fabric of our lives and the nation’s economy, and has played a critical role in all the major advancements that have made the 20th century one of the most defining times in human history. It is the author of great American moments, from the Apollo program and the PC, to the Internet and iPods, and all the great songs, stories and movies in between that have shaped our culture.

We cannot take IP rights for granted. Rather, we must strengthen IP enforcement and continue promoting innovation and creativity, and the laws that protect both. The next economic renaissance needs to happen now, and strong IP rights will help usher in this new era of job growth and economic revitalization.

Esper is executive vice president of the U.S Chamber of Commerce’s Global Intellectual Property Center.