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22nd November, 2017

A study was conducted Frontier Economics Ltd. together with International Trademark Association to assess the economic contribution of trade mark intensive industries in Malaysia, Indonesia, Philippines, Thailand, and Singapore. Trade mark intensive industries are defined as those industries that have an above average use of trade marks per employee. The economic
contribution of the five economies mentioned above were assessed by economic consensus, survey data of business activities, and national accounts data prepared by statistics authorities. The direct contributions by the industries taken into account in the statistical studies were such as terms of employment and the business output generated by any trade mark intensive
industry. An economic methodology was used to estimate whether value added per employee changes when an employee moves from a non-trade mark intensive industry to a trade mark intensive industry.

In Malaysia, the direct contribution of trade mark intensive industries was measured at 30.3% of the national GDP. Majority of the contribution was from the manufacturing sector to which on its own accounts for 17% of the national GDP. The statistics was followed by wholesale and retail, as well as information and communication sector being the next largest contributors with just over 5% of the national GDP. A comparison with other trade mark intensive industries showed that the aforementioned businesses triumphs significantly above their weight. Furthermore, an analysis of the remuneration data shows that about 12% were paid to workers by trade mark intensive industries. These key statistics implies the strong performance of trade mark intensive industries in the manufacturing sector. This however highlights the disproportionately large contribution of the manufacturing industries taken into account the economy as a whole. Further analysis into the manufacturing industry shows that computer, electronics and optical products, and coke and refined petroleum products dominate the industry. These industries are also significant export industries. Fuel accounts for about 20% of exports by value while electrical and office machinery for another 34%. While food and chemical products are less significant compared the mentioned industries but they are nevertheless strongly trade mark intensive. Other manufacturing industries such as agriculture, mining and quarrying activities may not be trade mark intensive in and of itself but they have an obvious linkage to the trade mark intensive industries and play an imperative contributor to the overall value added.

In comparison with countries that partake this study whereby the direct contribution of the trade mark intensive industries were valued just under a fifth for the Philippines and just under a third for Malaysia of the overall national GDP. This compares to a notably about 36% as measured in the EU. Contribution to GDP rises when indirect effects via output-linkages were taken into account in the statistics. There then brought about a low of 28% in the Philippines to a high percentage of 60% in Malaysia. The extent of these indirect linkages to the trade mark intensive industries is mainly attributable to primary industries such as agriculture, natural resources and extractive industries. This is significantly true in Malaysia which has a significant primary sector industry. The Philippines on the other hand is an outlier in that its agricultural sector shows a low level of dependence on the trade mark intensive industries. Furthermore, the trade mark intensive industries play an imperative role in the labour market. Their contribution to the employment in the countries of this study accounts for about 38% to 50%. The statistics also shows that the remuneration of the trade mark intensive industries is about 12% and 30% higher compared to non-trademark intensive industries. The statistical results exhibited the significant role of trade mark intensive manufacturing activities in which each country in this study accounted for the majority of the economic contribution. Within the manufacturing, computer as well as electronic related products, they have exhibited a significant economic contribution. This finding is especially true in the Philippines, Malaysia, Thailand, and in Singapore. This finding directly correlates to the international trade which has developed over the past decades and to meet the demands of the cross-border supply chain. Beverages and to a lesser extent, the food industries, were found to be trade mark intensive and economically significant in all the countries in this study. This could be explained by the importance of the availability of raw materials and labour costs. The econometric analysis further shows that the economic payoffs of trade mark intensiveness in all five countries as a whole increases the value added per worker to around 90%.

This study exhibited the importance of trade mark intensive industries in five countries and its’ potential effects in performance metrics such as in exports and value added per employee or worker. The outcome of the study also highlights the connection between trade mark intensive industries, export, and productivity and their implications in the growth of a nation’s economy. This does not however concludes that trade mark protection will inevitably boost the economic growth but dependent various factors such as national policies on exportation and trading.