Date of Publication: 
Wednesday, December 8, 2021

A key force that propels the economy forward is the exponential growth achieved by some small and new businesses. However, identifying small to medium enterprises (SMEs) with high growth potential is a key challenge for policy makers and investors alike.

Our latest research is an essential tool for policy makers and investors, as it breaks down the relationship between SMEs’ IP activity and the potential to achieve high growth in employment and turnover.

The tech sector created 65,000 new jobs during COVID-19, with SMEs accounting for 98% of businesses in the sector. While only a small (but growing) proportion of SMEs use IP rights, the research highlighted in the Intellectual Property Rights and Enterprise Growth report reveals that IP rights are a significant factor in the growth of SMEs.

For Australian SMEs, IP rights provide an important set of tools for gaining competitive advantage in a market. They are instrumental for attracting finance, licensing and selling intellectual assets, and earning a return on intangible investment.

The study used data on the full population of Australian businesses, tracking over 600,000 SMEs over the period 2002–2017. It shows that SMEs that have filed for IP rights are more likely to experience high sustained growth, especially if they have filed for trade marks.

Key findings

  • SMEs that own IP rights on average employ 3.5 times as many people as their peers with no IP rights and pay a higher median wage.
  • After filing for an IP right, SMEs are 16% more likely to experience high employment growth than their peers with no recent filings.
  • SMEs that file for patents, trade marks and design rights are more than 2 times more likely to achieve high turnover growth than their peers with no recent filings

These results highlight the role of IP rights for SMEs in attracting financing, securing a market position and capturing value from investment in intangible assets. The results also highlight the importance of small businesses identifying the intangible assets they own and different protections they need to find a competitive edge.

A snapshot of the findings is now available to download, as is the full economic research report.

Where to from here?

Working with SME assistance services, IP Australia is committed to ensuring our intellectual property system meets the needs of Australian SMEs (https://www.ipaustralia.gov.au/sme-portal)

Are you interested in collaborating to educate businesses and investors about IP’s role in promoting growth? Reach us at chiefeconomist@ipaustralia.gov.au.

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Last updated: 
22 December 2021