Global Intangible Assets Reach Nearly $7 Trillion in 2023 Investment Surge
“In both the 2008–2010 financial crisis and the COVID-19 pandemic, these investments showed stability and resilience, as intangible assets are often not susceptible to disruptions in physical supply and demand needs.”
In 2024, the World Intellectual Property Organization (WIPO) and Italy’s Luiss Business School (LBS) established Global INTAN-Invest, a database that measures the growing interest and investment in intangible assets. These results, released annually via the World Intangible Investment Highlights, emphasize the importance of intangible assets and evaluate how companies can optimize their investments for competitive advantages.
According to Cecilia Jona-Lasinio, the report’s co-author and Professor at LBS, “In today’s rapidly changing business environment, investing in intangible assets is essential for companies to enhance their capabilities to cope with the digital transformation, to adapt quickly, and to stay competitive.”
The report aims to enhance transparency and accuracy in global intangible asset reporting as this information is of growing importance for comprehending the true extent and drivers of economic and productivity growth. According to WIPO and LBS, without this data, companies can face significant adverse consequences, such as undervaluation and the misallocation of resources. The June 2024 report includes data that provides estimates of intangible investment spanning from 1995 to 2023 and covers 31 global economies.
Key Takeaways from the 2024 Report
In collaboration with LBS, WIPO reported that investment in intangible assets rose drastically in 2023 alone, reaching a total of $6.9 trillion. These investments have grown more than three times faster than physical assets over the past 15 years, increasing from $2.9 trillion in 1995 to their current levels.
The report explained that in 2023, intangible investments accounted for greater than 16% of GDP in countries such as Sweden, the United States, and France — with India experiencing the most rapid growth in intangible investments from 2011–2020 at a rate greater than 7%.
Intangible Investments and Economic Crises
WIPO and LBS further evaluated the stability of intangible investments during economic crises. In both the 2008–2010 financial crisis and the COVID-19 pandemic, these investments showed stability and resilience, as intangible assets are often not susceptible to disruptions in physical supply and demand needs.
Furthermore, following the recent downturn in venture capital financing and increasing interest rates, intangible investments remain strong. Before and after the COVID-19 pandemic, countries such as Luxembourg, Sweden, and France saw the largest increase in intangible investment. Even in times of economic crisis, this shift underscores the continued need for businesses to invest in innovation, research and development, and digital capabilities to remain competitive in the marketplace.
GDP Trend Shifts
In the case of both high-income and developing economies, intangible assets are accounting for larger portions of total GDP.
In 1995, U.S. investments in intangible and tangible assets were nearly equal, with each accounting for 12-13% of the total share of GDP. However, since 1995, this gap has grown immensely. The WIPO-LBS report shows that U.S. intangible investment shares of the GDP today are nearly double that of tangible investments.
This same trend can be seen in developing economies such as India. Further validating the stability of these assets during economic crises, India’s GPD share of intangible assets demonstrated a continued upward trend between 2019-2020.
However, this trend is not uniform across all economies. From 1995 to 2010, Japan’s investment in tangible assets steadily declined, but after 2010 that trend flipped. However, Japan’s intangible investment did not follow suit, remaining relatively flat in recent years.
Importance and Impact of Reporting Intangible Assets
Despite the extensive 2024 report, WIPO and LBS noted that our understanding of the size, impact, and breadth of intangible assets is limited. They hope to ultimately empower as many countries as possible to generate data independently about their intangible assets. Collective efforts in data acquisition could increase global awareness about the importance of investing in intangible assets.
In their article announcing the report, WIPO and LBS recognized that, while intangible assets may not be readily apparent, their impact is profound as they generate more high paying jobs, improve product reliability and foster innovation.
WIPO Director General, Daren Tang, underscored the importance of the report’s findings, stating, “Measuring this data is crucial as it provides governments with the necessary insights to prioritize innovation in their growth policies.”
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