Mar 052013
 

jon bandToday I’m releasing a paper on foreign ownership of firms in IP intensive industries.  Here is a summary of the paper:

For decades, U.S. domestic and foreign IP policy has been predicated on the assumption that U.S. firms dominated both domestic and foreign markets for IP products. In an effort to evaluate the standing of U.S. firms in IP intensive industries, this paper identifies the “nationality” of the leading firms in several important IP industries. The paper finds that for many industries, this assumption of U.S. dominance is no longer correct.  This suggests that at times, IP policies adopted by Congress and the Executive Branch may benefit foreign corporations at the expense of U.S. consumers.

Here are some of the paper’s key findings:

  • Four of the “Big Six” publishers, the largest English language trade publishers, are foreign-owned. More than 80 percent of the global revenue of the Big Six is generated by these foreign-owned companies.  These foreign-owned companies published more than two thirds of the trade books in the U.S.
  • Four of the five largest STM (science, technical and medical)/Professional publishers are foreign-owned.  More than 90 percent of the revenue of the five largest STM/Professional publishers was generated by foreign-owned firms.
  • Only seven of the world’s 50 largest publishers of all categories are U.S.-owned.
  • The book publishing industry in Europe has approximately twice as many employees as in the United States.
  • Of the top ten best-selling fiction authors in any language whose work is still in copyright, five are foreign.  A British author wrote three of the top five best-selling books in the U.S. in 2012.
  • Two of the three major record labels are foreign-owned.  These two labels have a market share of 59 percent.
  • Thirteen of the twenty best-selling recording artists are foreign.
  • Of the 50 most popular motion pictures in the United States in 2012, half were filmed partly or entirely outside of the United States.
  • In 2013, the Oscar winners in thirteen of 24 categories were foreign. In 2012, the Oscar winners in eleven of 24 categories were foreign.  In 2011, the Oscar winners in eight of 24 categories were foreign.
  • Seventy percent of the most recent generation of game consoles were manufactured by Japanese companies.  Japanese companies have manufactured 92 percent of all game consoles ever sold.
  • In 2011, foreign companies obtained 7,000 more U.S. patents than U.S. companies.
  • In 2011 and 2012, seven of the top ten companies receiving U.S. patents were foreign.
  • 57 percent of the global revenue of the fifteen largest pharmaceutical companies was generated by foreign-owned companies.
  • The majority of the employees of both the U.S. and the foreign-owned pharmaceutical companies work outside of the United States.

There is absolutely nothing sinister about foreign ownership of firms in IP intensive industries, including foreign ownership of companies originally established in the U.S.  This is to be expected in a globalized economy with multinational corporations and complex cross-border supply chains.  Moreover, many countries in Western Europe and East Asia are at the same level of technological and economic development as the United States.  The critical point is that in such a globalized economy, U.S policymakers should no longer assume without reflection that the beneficiaries of protectionist IP policies are U.S. firms and, by extension, U.S. workers and shareholders.

The paper is at: http://infojustice.org/foreignownrep.

An info-graphic is at http://infojustice.org/foreignowngraph.

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