Mr. Chairman, first I'd like to thank you for holding this oversight hearing. It's important that the committee receive an update on what the Office of the Intellectual Property Enforcement Coordinator has been doing to improve protection of American intellectual property. Welcome back to the committee, Ms. Espinel. We're glad to hear from you today.
The United States is a global leader in innovating, creating, and developing new technologies and products. Intellectual property plays a crucial role in supporting technological advances, innovation and creativity. Not only that, intellectual property plays a critical role in job creation, economic growth, and the balance of trade.
A recently released report by the Department of Commerce measured the economic impact of intellectual property on the United States economy and found that "the entire U.S. economy relies on some form of intellectual property, because virtually every industry either produces or uses it."
Among its principal findings, the Commerce Report found that in 2010, 27.7 percent of all jobs in the United States were directly or indirectly attributable to intellectual property intensive industries. Specifically, in 2010, intellectual property intensive industries directly supported 27.1 million American jobs and indirectly supported another 12.9 million jobs. The jobs in intellectual property intensive industries paid well compared to other jobs, specifically 42 percent higher than in other non-intellectual property intensive industries. Further, according to the Commerce Report, in 2010, these industries accounted for approximately $5.06 trillion in value added, or 34.8 percent of United States gross domestic product. Merchandise exports of intellectual property intensive industries totaled $775 billion in 2010, accounting for 60.7 percent of all United States exports.
This data demonstrates the importance of intellectual property in the United States economy and why intellectual property should be protected. So it is really unfortunate that intellectual property theft has increased dramatically, adversely impacting American businesses that innovate and generate new products and jobs for Americans. According to one report, domestic production and consumption of counterfeit and pirated products cost our economy $215 billion annually, while counterfeit and pirated products account for $360 billion in losses in international trade annually. The global impact of counterfeiting and piracy is even more dramatic, amounting to $650 billion annually and resulting in the loss of 2.5 million jobs in the G-20 economies.
In addition to the loss of jobs and adverse impact on the United States economy, intellectual property theft is a serious consumer protection issue. I can't imagine that anyone intentionally sets out to buy unsafe or defective counterfeit goods, especially counterfeit pharmaceuticals. Yet unsuspecting consumers are scammed all the time into purchasing these dangerous and potentially life threatening products. Even the federal government, including our military, is duped into buying harmful and sub-par counterfeit products, putting people at risk. This is not acceptable.
So it's important for the Judiciary Committee to examine how industry and the federal government are addressing intellectual property crimes, what is being done to enforce intellectual property rights, and how the word is getting out that intellectual property theft hurts the United States economy, threatens jobs, and puts people at risk of harm. It's also important for us to ensure that efforts to combat counterfeiting and piracy do not limit freedom of expression, inhibit innovation, impair privacy and security, or undermine the internet.