As the Rainbow Loom business takes off, owner Cheong Choon Ng is facing competitors who try to knock-off his product. (Courtesy: Rainbow Loom's Facebook page)
Ready for some good news about Michiganís economy?
The number of venture capital firms in the state has grown 44 percent since 2009, according to a survey released earlier this month. Thatís more than seven times the rate of growth nationally. Michiganís VC firms have more money under management than ever ó and made a record number of investments in 2013.
Intellectual property (IP) ó the ideas that underpin inventions, creative works, and commercial brands ó is the primary force motivating all this economic growth. And itís the foundation of the toy company Iíve founded here in Michigan, Rainbow Loom.
To keep the state economy humming, Michiganís leaders must ensure that its residentsí intellectual property is protected.
Michigan has emerged as the high-tech hub of the Midwest. Last year, over 13,200 patents were granted to Michiganians, the sixth-highest total in the nation.
Leading the pack are automakers ó GM and Ford ó as well as automotive suppliers like Johnson Controls Inc. and Gentex Corp.
But patents also come from our stateís universities, high-tech start-ups like Detroit Labs, clean-energy firms like Ann Arbor-based Root3, and health and drug companies like Esperion Therapeutics in Plymouth.
A patent is the cornerstone of Rainbow Loom. Four years ago, I invented a toy loom that allows kids to make rubber bracelets. The product has taken off ó ours was the most-searched toy on Google last year, and weíve sold 6 million units.
Here in Michigan, IP supports nearly 2 million jobs and contributes $169 billion to the state economy. Itís directly responsible for the 13 jobs Iíve created.
And IP will remain the currency that creates jobs in Michigan. Employment in IP-intensive industries ó including the automotive, life sciences, and engineering sectors ó is growing twice as fast as other private-sector employment. IP accounts for 40 percent of all new jobs created in Michigan.
These jobs offer a path to the middle class. The average IP worker here makes an annual salary of $50,667, compared to $39,045 for the average private-sector employee.
Research and discovery are crucial to the innovation process that supports these jobs. But so too is commercialization. Even the best invention canít do much good sitting on the shelf. New products and services must be brought to market if we are to benefit from them.
If inventors and researchers are to put their ideas into practice, their innovations must be profitable. They need laws that protect the economic value of their ideas and that compensate them for the time and money they spend developing them.
The U.S. system of IP protection ó patents, trademarks, and copyrights ó recognizes that an innovator has a right to own what he or she creates.
Creators arenít the only ones who stand to gain from strong IP protections. Consumers enjoy the fruits of an inventorís idea through new products and technologies.
Michiganís economic future depends on our ability to innovate. With strong IP protections, we can sustain the economic progress that has given rise to job-creating firms like mine in Michigan.
Cheong Choon Ng is CEO of Novi, Mich.-based Rainbow Loom.