EPO and EUIPO study finds link between IPR and SME growth

In Insights

9 July, 2019

A recent study by EPO and EUIPO explores the relationship between prior IPR activities of SMEs and the likelihood of experiencing a high-growth period.

The purpose of the research was to investigate the following questions:

  • Can the filing of IP rights be used as a reliable predictor of the likelihood that an SME will experience high growth?
  • If so, what are the types of IPR strategies that perform best as a signal of SMEs’ growth potential?

Interestingly, the study found a correlation between prior IPR activity of SMEs and the likelihood of experiencing high-growth periods. However, as noted in the study: “this correlation should not be interpreted as a direct causal effect: the mere filing of an IP right is not sufficient to trigger growth, but it can signal a firm’s stronger ability to sustain growth through the creation, protection and exploitation of intellectual assets”.

Even more interesting, the study has found a greater likelihood of achieving high-growth with prior use of multiple IPR activities, as illustrated in the figure below (extracted from the study):

 

The report highlights five main findings from the study that will be of particular interest to SMEs:

  1. SMEs with prior IPR activities are more likely to grow than other SMEs
  2. The likelihood of becoming a high-growth firm (HGF) is even higher for SMEs that have filed a European IPR
  3. Prior patent filings perform best as HGF predictors in high-tech and low-tech industries
  4. Prior trade mark filings perform best as HGF predictors in consumer-oriented industries
  5. SMEs that use bundles of trade marks, patents and designs instead of a single category of IPR are even more likely to achieve high growth.

The findings highlight a correlation between intellectual property rights activities of SMEs and not only their future growth ability, but also their longevity in increasingly crowded and competitive market spaces.

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