Annex – IP as a Development Tool: Supplementary Statistical Analysis to the U.S. Chamber International IP Index

 

This annex supplements the analysis in the 4th edition of the U.S. Chamber of Commerce’s International IP Index (the Index) concerning the relationship between intellectual property (IP) standards and development of innovative and competitive economies. By comparing the U.S. Chamber of Commerce’s International IP Index scores with an expanded number of economic variables using correlations (statistical measures of the likelihood of two elements occurring together), the analysis in the Index and in this annex builds on the statistical analysis presented in the 3rd edition of the Index with the goal of presenting an even clearer picture of the economic benefits of strengthening IP rights.

Specifically, the 19 correlations in this annex include many of the correlations analyzed in the 3rd edition, along with 6 new correlations. All correlations in this annex rely on the new 2016 Index scores, which include the addition of 8 new economies, representing an increase in the sample size of over 25%. They also utilize the latest available data for the variables measured in comparison to the Index scores—both those included in the 3rd edition and those that are new in this edition. As such, the correlations here reflect the most up-to-date conditions and outcomes.

The larger sample size and updated datasets paint an even more compelling picture of the clear economic benefits of protecting IP. Broadly speaking, all correlations re-analyzed in this edition of the Index and annex demonstrate a similar—and in many cases, stronger—positive association. In fact, using the updated scores and data and the expanded sample size, at least two-thirds of the correlations presented last year in the third edition of the Index display a stronger correlation in this edition, further substantiating the findings made. In addition, the larger sample size of economies has allowed for greater insight into the benefits of making even incremental improvements in IP protection. Specifically, in several instances, even economies whose Index scores come in at the median or slightly above are more likely to experience many of the positive economic and societal outcomes discussed below relative to economies that continue to lag behind.

Of the 6 new correlations in this edition and annex—5 of which were included in the full report—the majority examine the relationship between a strong total IP environment and a wide number of economic activities reflecting fundamental conditions and activities that enable economies to create their own, bespoke paths to innovation and competitiveness. These range from a strong science base and access to financing, to foreign direct investment (FDI) and advanced technology markets, to actual innovation output, and to the latest digital technologies and creative content.

The annex is organized as follows:

• The first set of correlations looks at the relationship between the total IP environment, measured by the overall Index score, and economy-wide benefits, including research and development (R&D) spending, FDI, technological sophistication, job growth, and the business climate.
• The second set of correlations focuses on scores specific to patent and copyright protection, examining their relationship with technology and creative outputs, respectively.
• The third set of correlations looks at indicators specific to three key sectors—life sciences, information and communication technology (ICT), and creative content—and shows their relationship with elements such as levels of advanced biopharmaceutical R&D, added value of properly licensed software, and access to creative content.

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