Robert Shapiro, the former Under Secretary of Commerce for Economic Affairs, also testified before the House Subcommittee on Intellectual Property last week. His testimony was quite interesting. It included some intriguing statistics such as:
“Over the years 1995-2001, the development of new information technologies accounted for 28 percent of those productivity gains, capital investment in those technologies accounted for another 34 percent, research and development accounted for 10 percent, and changes in the organization of firms and worker training in response to these innovations accounted for another 10 percent. By applying this approach to data for more recent years, other researchers estimate that nearly 90 percent of U.S. economic growth from 2001 to 2003 can be attributed to increases in the stock of intangible assets.”
and
“Finally, research by the McKinsey Global Institute has documented the role of innovation in the value of large corporations. They found that in 1984, the book value of the 150 largest U.S. public companies – what their physical assets could be sold for on the open market – was equal to 75 percent of their market caps: Three-quarters of the value of large American companies was derived from its physical assets. By 2005, the book value of the 150 largest American companies was equal to just 36 percent of their market caps: Nearly two-thirds of their value is now based on their intangible assets, principally the value of the ideas protected by patent and copyrights.”
His written statement is available here: [Link]. If you agree with his conclusions, you might want to pass along some of these statistics to your local Congressperson or business journal editor.