EU 19 Dec 2019

SMEs with clear IP-strategy have higher growth shows study

Small and medium-sized enterprises (SMEs) that apply for patents, trademarks or designs have an increased probability of experiencing high growth than SMEs that do not, shows a joint EPO-EUIPO study that was released earlier this year.

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. 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.

The 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.

“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 trademarks, as well as other IP rights, have a crucial part to play. A SME that has recently registered at least one trademark is 13% more likely to experience high growth in the future.”, says The Executive Director of EUIPO, Christian Archambeau.

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

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%.

“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.”, says The President of the European Patent Office, António Campinos.

The majority of our clients are SMEs and on a daily basis we see the positive effects that IP-protection can have for these companies.

Read more about the services provided by Groth & Co for a selected number of SMEs among our cases here

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