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January 12, 2018

IP Theft Threatens America's Growing Economy and Great Jobs

 
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With tax reform having just become law, economists are trying to project the effects on the U.S. economy. Such calculation in a highly complex, dynamic economy is at least as much art as science but one trend seems clear -- the job market will continue to tighten. Some economists are predicting that unemployment will drop to 3%, nearly matching the lowest average unemployment rate on record (2.93% in 1953). But there are jobs and then there are good jobs—which will these new jobs be? A study by NDP Analytics (http://www.ndpanalytics.com/report-ipintensive-industries-drive-economic-growth-2017) provides some insight. It’s the intellectual property-intensive industries that will be driving the growth and creating the types of jobs and careers that people want.

Currently, the IP-intensive industries comprise 58 million jobs in our economy, and these are not just average jobs. The wages for these jobs, more than $67,000 a year, are 46% higher than for jobs in non-IP industries. But those high wages and satisfying careers do not just happen magically.  What is the secret sauce? Innovation.

The higher pay in these IP jobs is because productivity in IP industries is higher per person than in other industries. Companies reward that success by paying more. These industries invest more in research and development--dramatically more—than other industry sectors do. More research and development leads to more new and innovative products to sell around the world. As consumers adopt these cutting-edge products, employers can hire more people to be more productive at higher wages creating great careers.

Higher productivity not only means higher paying jobs, but enhanced global competitiveness for the U.S. economy. It’s not a stretch to conclude that the IP-intensive industries are the keys to the future of the U.S. economy.

So, when something like “TickBox” appears, we all need to pay attention.

The “TickBox” is a sort of “Kodi Box.” A Kodi box is a small black electronics box that is merely an open-source media player. However, it allows users to modify it with a variety of software, including software that enables the easy streaming of pirated content. TickBox actually comes loaded with this theft enabling software ready to go and accessible for even the most novice of technology users. And in case a potential buyer missed the point, the box has been expressly marketed as a way to stream videos from the web “for free!”

As the LA Times explains, “TickBox relies on software called Kodi, an open-source media player that developers can modify with apps for watching films and TV. Kodi technology itself, which is maintained by software engineers who work voluntarily, is legal and has legitimate uses, experts said. Some people use it as a convenient way to access content from licensed sources.

But the technology also makes it vastly easier for consumers to watch pirated movies, TV shows and sports. A TickBox device, which connects to a TV, directs people to load software add-ons that allow users to search for movies and television programs online and watch them without paying. The add-ons scrape video content from websites to stream video, including live TV and sports, from the internet without authorization.

The ethical problem here seems clear: Creating a device and then actively encouraging its use to commit theft is wrong. But in addition, this theft comes with damage to the economy, as an economy depending on IP for its economic future cannot tolerate widespread IP theft.

It’s good and proper to draw attention to the theft by China and other countries of U.S. IP. But what about IP theft happening here in the U.S., right out in the open?

This theft targets a key pillar of the U.S. economy, and puts at risk some of those solid jobs and great careers. 




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