High-growth firms and intellectual property rights

Small and medium-sized enterprises (SMEs) are often said to be the backbone of the European economy. However, a large proportion of their contribution to growth and job creation is in fact generated by a small fraction of SMEs. These high-growth firms (HGFs) are a priority target for policy-makers. They include start-ups as well as more classical SMEs, some of which may become Europe's future industry champions. As compared with other SMEs, their success frequently stems from investment in innovation and intellectual assets, and their growth typically involves international development. Formal intellectual property rights (IPRs) such as patents, trade marks and industrial designs can be instrumental for these innovative SMEs to appropriate the value of their ideas and secure a return on their investments in intangible assets. Small businesses can leverage IPRs to secure higher margins, license technology, establish collaboration agreements and attract investors. They can also depend on IPR protection in foreign markets to scale up their activities and compete with large, established enterprises in those markets. The present study aims to determine the importance of IPR activities for HGFs in Europe. To this end, it assesses whether future HGFs make more frequent use of IPRs than other SMEs. It also examines the particular ways in which these firms shape their IPR strategies prior to experiencing high growth.