Introduction

The World Intangible Investment Highlights report, co-published annually by the World Intellectual Property Organization (WIPO) and the Luiss Business School, reveals that intangible investments grew at three times the rate of tangible investments between 2008–2023, proving resilient despite economic uncertainty. Investment into intangible assets, such as research and development (R&D), software and data, brands, and design, has consistently outpaced investment in tangible assets, such as machinery and equipment, since 2008. As a result, investment into intangible assets constitutes a growing share of gross domestic product (GDP) among the economies covered by this report.

Key Trends in Intangible Investment

1. Despite multiple crises and interest rates increasing, intangible investment has grown three times faster than tangible investment between 2008 – 2023 across the 26 economies covered, which together accounted for 52 percent of global GDP in 2023.

2. The fastest-growing types of intangible assets over the last decade have been software and data, followed by brands, organizational capital, and new financial products. Software and data and brands grew three times faster than R&D between 2011–2021.

3. Organizational capital leads among various intangible asset types, making up close to 30 percent of total intangible investment, followed by R&D (19 percent), software and data (16 percent), then brands (14 percent), and design (10 percent).

4. The US vastly outperforms other countries in terms of levels of intangible investment, followed by the EU-22 aggregate, which reaches about 60 percent of the US level. In 2023, the level of intangible investment for the US was more than six times that of France, which ranked second among the sample economies.

5. Intangible investment intensity and the level of PPP-adjusted GDP per capita are found to be positively correlated. India lies above the correlation line, reflecting a higher intangible investment intensity (relative to its level of GDP per capita) than what is predicted by the correlation line.

Challenges

1. There are significant gaps in the measurement of intangible investments. Approximately 60% of such investments go unmeasured due to the lack of recognition in national accounting frameworks.
2. Existing estimates often have a delay of two to three years and are available only for a limited set of advanced economies.
3. Emerging economies often lag in intangible investment compared to advanced economies, affecting their competitive positioning and economic growth.

Recommendations

1. To develop and adopt more comprehensive frameworks that better capture the full range of intangible assets.
2. To produce both yearly and quarterly estimates of intangible investment in a more timely manner.
3. To expand the coverage of intangible investment data beyond advanced economies to include emerging economies, which will create more inclusive and accurate global data.
4. To empower emerging economies to generate data on intangible investments through technical capacity-building​.
5. International Trade and Research Center advocates for policy changes that recognize the importance of intangible assets in economic planning and development.

Conclusion

The World Intangible Investment Highlights report underscores the increasing importance of intangible assets in the global economy. Intangible investments play a pivotal role in enhancing firms’ competitiveness, driving innovation, and fostering economic growth. However, significant challenges in measurement, coverage, and data timeliness persist, hindering a comprehensive understanding of these assets. Addressing these challenges through improved measurement techniques, expanded coverage, timely data production, and capacity-building efforts is essential for leveraging intangible assets to their full potential. By doing so, policymakers and businesses can make more informed decisions, ultimately contributing to sustainable economic development and innovation.

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