The International Trademark Association (INTA) recently published an impact study titled The Economic Contribution of Trademark-Intensive Industries in Indonesia, Malaysia, the Philippines, Singapore, and Thailand. The report offers both validation and insights to the economic structure of the countries while highlighting the importance of a robust trademark regime for economic development. The countries cover 90% of ASEAN’s total GDP.

The study evaluated the direct and indirect GDP contribution of trademarkintensive industries; direct contributions being employment, output and value added while indirect contributions being interdependency factors like purchase and sales of inputs between trademark and non-trademark-intensive industries.

A second measurement the study offers is the “trademark effect,” an estimated value-add per worker when one moves from a non-trademarkintensive to a trademark-intensive industry.

Direct contribution of trademarkintensive industries averages at 28% of GDP, while indirect activitiesincluded contribution averages at 49%. Trademark-intensive industries employ an average of 21% of the countries’ total employment, and make up an average of 50% in exports in value.

In general, manufacturing is the most prominent sector in trademarkintensive industries – of which computer and electronic manufacturing are most dominant – followed by the food and beverages sector.

Moving from a non-trademarkintensive to a trademark-intensive industry is associated with a 90% increase in per worker value-added, taking into account country-specific characteristics.

Whether or not an industry is trademark-intensive also impacts exports: being trademark-intensive is associated with a 11% increase in exports as a share of output.

Country Highlights

Thailand

Trademark-intensive sectors tend to themselves consume a large share of inputs from other trademarkintensive sectors. This suggests particular reliance on certain product attributes like durability, reliability and attractiveness conveyed by brand, especially in industries like agriculture, hotels and restaurants and healthcare.

Malaysia

Computers, electronics and optical products, refined petroleum products and coke take up the largest share in trademark-intensive manufacturing. These activities also form a significant portion of the export industries.

The Philippines

The country’s trademark-intensive industries are smaller relative to the other four countries, although they share the similarity that the economic contribution is disproportionately large relative to their absolute numbers. This is in part due to a wage premium of around 30% in trademark-intensive industries over non-trade-intensive activities.

And unlike Malaysia and Thailand, the Philippines’ agricultural sector doesn’t consume as much trademarkintensive input, contributing to its relatively low indirect economic output.

Indonesia

In many areas of this study, the analysis for Indonesia was hindered by lack of visibility in trademark registrations and sector performance data, especially in the services sector.

While greater economic contribution is observed in trademark-intensive manufacturing activities like food products, chemical products and motor vehicles, the difference between estimated contribution by trademarkintensive and non-trademark-intensive industries is not found to be statistically significant, resulting in an inconclusive “trademark effect.”

This could be caused by factors like insufficient data, slower growth in the food products industry where Indonesia has a greater focus compared to computer and electronics sectors, and insufficient enforcement of IP protection.

Singapore

Singapore shows the highest measurements of trademark-intensive industry contribution among the five countries, and boasts the highest GDP and share of tertiary industry among the five.

This also explains why Singapore sees the smallest boost to indirect economic contribution: it doesn’t have a substantial agricultural sector, which generally has a strong linkage to trademark-intensive sectors despite not being trademark-intensive itself.

Key Takeaways

Data transparency facilitates research and discussion. It is consistent access to accurate, clean and complete data points like the various resources employed in this INTA report that facilitates quality research. On the other hand, hurdles like that of Indonesia form a vicious cycle where IP information is incomplete and non-transparent, disabling insightful research and further dampening momentum for IP legislation and enforcement.

“[The INTA report] will certainly help to generate more conversations and raise awareness on the importance of IPR. It provides an excellent tool and the required data for brand owners to utilize when engaging various stakeholders,” says Jin Nee Wong, joint managing partner of Wong Jin Nee & Teo in Kuala Lumpur.

Trademark-intensiveness is closely tied to export value, and export-oriented growth is key to the five countries. This magnifies the importance of the INTA study as it highlights the close ties between trademark-intensiveness and productivity, pointing to the importance of a holistic IP framework to enable long-term economic growth.

And as developing countries seek to move up the global value chain, the interaction between producers, policy makers and the law enforcement will only become more complex. “[Companies] are increasingly cognizant of the various roles and benefits of IPR and have made significant strides in leveraging their IP assets to enhance their competitiveness,” says Wong.

Catch-up and other developments. For countries like Thailand and Indonesia that rank lowest in terms of trademark-intensive input, much more can be done to improve the IP regime, and some of that change is already under way. Daniel Greif, a principal at Spruson & Ferguson in Bangkok, points out that the government’s Thailand 4.0 initiative will bring IP to the forefront. “Thailand 4.0 is designed to move Thailand towards a value-based economy with more emphasis on creative, innovative, high-technology industries. These industries are by nature trademark-intensive,” he says.

“And the Madrid Protocol will come into effect in November 2017, enabling the country to operate as a terminus of the trademark application filing system under the Protocol, processing outgoing applications as an Office of Origin and examining incoming applications as a Designated Office,” Greif adds. That is not to mention the 20-year Intellectual Property Roadmap published in January 2017 and the opening of a Specialized Appeal Court in October 2016, both enhancing the IP framework and improving accessibility for litigants in Thailand.

While the INTA report yields good findings, much more is to be anticipated as Asia’s IP regime evolves rapidly.

	Direct contribution to GDP	Indirect contribution to GDP	Employment	Share of exports	Trademark effect	Main industry in manufacturing
Thailand	22%	40%	13%	60%	95%	Computer, electronics and related equipment
Malaysia	30.3%	60%	24%	55%	108%
The Philippines	17%	41%	15%	47%	100%
Singapore	50%	55%	29%	60%	82%
Indonesia	21%	51%	26%	27%*	-**	Food products

 

Table 1: Trademark-intensive industries and key performance indicators

Source: Frontier Economics calculated the figures based on national survey data, national accounts data, World Bank and OECD sources. Note: *Employment figures for Indonesia refer to manufacturing only. **No statistically significant effect found.