During December 2022, while the holiday season was in full swing, the International Intellectual Property Alliance (IIPA) released the latest installment of a series of economic studies that quantify the contributions of the copyright industries to the U.S. economy. Copyright Industries in the U.S. Economy: The 2022 Report (2022 Report) is the 19th such report that IIPA has commissioned since 1990. Notably, the 2022 Report breaks new ground by measuring the copyright industries’ significant contributions to growth and jobs in the U.S. digital economy.
The 2022 Report covers the period from 2018 to 2021 and, like prior reports, it is based almost entirely on U.S. government data. Here are some of the key findings:
- In 2021, the core copyright industries added $1.8 trillion dollars of value to U.S. GDP, accounting for 7.76% of the entire U.S. economy.
- The core copyright industries employed 9.6 million American workers in 2021, accounting for 4.88% of the nation’s workforce and 5.53% of total private employment in the United States.
- The core copyright industries grew at an aggregate annual rate of 6.15% between 2018 and 2021, while the average annual growth rate for the entire U.S. economy during that period was only 1.76%.
- Core copyright workers were paid an average annual compensation of $121,583 in 2021, exceeding the average annual compensation paid to all U.S. workers – $80,566 – by 51%.
- In 2021, sales of major U.S. copyright products in overseas markets amounted to $230.3 billion, an increase compared to previous years, outpacing exports of other major U.S. industries.
- The core copyright industries’ substantial contributions to the U.S. digital economy included 52.26% of value added and 48.1% of employment in 2021, even though the U.S. digital economy definition does not encompass the full scope of the copyright industries’ digital activities.
Background and Methodology of the 2022 Report
Stephen E. Siwek at Economists Incorporated (now known as Secretariat Economists) prepared the first study in 1990 and every subsequent study through the 17th report in 2018. With the retirement of Mr. Siwek, Robert Stoner and Jéssica Dutra of Secretariat Economists, using the methodology pioneered by Mr. Siwek, prepared the 18th report in 2020 and the 2022 Report.
As international trade of copyright materials increased over the past few decades, foreign governments and intergovernmental organizations, such as the World Intellectual Property Organization (WIPO), began to recognize the importance of measuring the economic impact of the copyright industries on national economies. In 2003, WIPO issued a Guide on Surveying the Economic Contribution of the Copyright-Based Industries (Guide). The Guide, developed by an experts’ group of economists from many countries, including Mr. Siwek, described methodologies for measuring the role of copyright industries in domestic economies. Those methodologies have since been used in over 50 countries’ national reports. In 2015, WIPO published a revised edition of The Guide, whichreferenced the many national copyright industry studies that were released since the original Guide was published and examined the extent to which WIPO principles were adopted in national studies throughout the world. These national studies highlight the stakes, in terms of jobs and economic growth, for reforming copyright laws, improving enforcement, and opening markets to enable trade in copyright goods and services.
The 2022 Report continues to follow WIPO’s international standards and recommendations, including their standard for classifying copyright industries. Consistent with these standards, the 2022 Report defines the “core” copyright industries as “those industries whose primary purpose is to create, produce, distribute or exhibit copyright materials . . . [including] books, newspapers and periodicals, motion pictures, recorded music, radio and television broadcasting, and software in all formats, including video games.” The 2022 Report also defines three additional categories of industries that contribute to the copyright economy. Collectively, the economic contributions of these four groups of industries, referred to in the 2022 Report as the “total” copyright industries, are even greater than those of the core copyright industries.
Copyright Industries’ Impact on the Digital Economy
The 2022 Report includes a groundbreaking section that assesses the copyright industries’ significant contributions to the U.S. digital economy, as that concept has been defined by the Bureau of Economic Analysis (BEA). For decades, the copyright industries have been at the forefront of digital technological advances, including new digital services, apps, and business models, to create and disseminate copyrighted materials. As a result, the copyright industries play a significant role in the digital economy. Unfortunately, measuring that impact proved to be extremely challenging mainly because defining the scope of the digital economy has been elusive. However, following on a 2020 OECD report that outlined a framework for measuring the digital economy, the BEA recently provided a practical definition for the U.S. digital economy. Using this BEA definition, the authors of the 2022 Report measured how much employment and value added the U.S. copyright industries (as defined using the methodology discussed above) contributed to the U.S. digital economy.
The results are very compelling:
- In 2021, the core copyright industries accounted for 52.26% of the U.S. digital economy, while the total copyright industries accounted for 64.87%.
- Both core and total copyright economies experienced positive growth throughout the entire observed period as a percentage of the U.S. digital economy.
- In 2021, the core and total copyright industries contributed 48.1% and 58.9% respectively to U.S. digital economy employment.
Moreover, as the 2022 Report notes, some of the copyright industries’ digital activities are not encompassed by the BEA digital economy definition, including digital production of music, post-production of movies, theatrical distributions of movies in digital formats, and e-book publishing. As such, according to the 2022 Report, “[t]hese numbers represent a lower bound of contributions by the copyright industries to a broader digital economy…”
Impact of the COVID-19 Pandemic
Some of the period covered in the 2022 Report has been impacted by the COVID-19 pandemic, which has taken a toll on individuals, governments, and industries around the world, including the copyright sector. Nevertheless, the 2022 Report reflects that the copyright industries continued to be a significant contributor to the U.S. economy and likely will remain so when the impact of the virus has been mitigated. For example, while U.S. GDP decreased by 2.77% from 2019 to 2020, reflecting the strain of the pandemic, the core copyright industries’ value added grew by 0.89% during that time period, and that growth accelerated to nearly 13% in 2021.
While the 2022 Report shows that the copyright industries remain significant contributors to the U.S. economy, including the U.S. digital economy, significant challenges remain. As the IIPA has outlined in myriad reports to the U.S. government, problems such as inadequate copyright legal and enforcement frameworks, especially in the digital environment, and market access barriers hamper the growth of digital markets in the United States and abroad. The 2022 Report underscores what is at stake and provides a compelling argument for more effective laws and improved enforcement and market access to promote and foster the growth of the copyright industries throughout the world for the benefit of consumers, as well as the creators, producers, and distributors of copyrighted materials and their workers.
Kevin Rosenbaum is the Executive Director of the IIPA, a private sector coalition, formed in 1984, of trade associations representing U.S. copyright-based industries working to improve international protection and enforcement of copyrighted materials and open up foreign markets closed by piracy and other market access barriers.
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