GENEVA: According to the UN on Wednesday, there has been a “fundamental shift in how economies grow and compete”, with a rise in investment intelligence surpassing the acquisition of tangible assets last year.
According to a new report from the United Nations’ World Intellectual Property Organization (WIPO), investments in intellectual property backed assets expanded three times faster in 2024 than investments in tangible assets like buildings and machinery, which have been negatively impacted by high interest rates and a slow economic recovery.
Co-published with Italy’s Luiss Business School, the analysis revealed that intangible investment in 27 high and middle income nations increased by around 3% in real terms last year, from $7.4 trillion to $7.6 trillion. In a statement, WIPO chief Daren Tang said, “We’re seeing a fundamental shift in how economies grow and compete”.
He emphasized that “this trend has profound implications for policymakers”, nothing that companies are increasing their investments in intangible assets while decreasing their investments in factories and equipment during uncertain times.
Sweden’s economy is the most dependent on intangible assets globally.
“Countries will be better positioned to grow and thrive in a global economy increasingly driven by technological, digital, and cultural innovation if they understand and nurture intangible investment”. According to WIPO, the United States invested over twice as much on intangible assets in 2024 as the countries that came in second, France, Germany, Japan, and Britain.
Sweden, on the other hand, continues to have the most intangible asset-intensive economy in the world, with 16 percent of its GDP coming from these investments.
With an intensity of 15% of GDP, the US, France, and Finland came next. According to WIPO, India’s intangible investment intensity of around 10% places it ahead of Japan and several EU economies.
According to the paper, even in times of crisis, investments in intangible assets have grown steadily and robustly, expanding at a compound annual rate of about 4% between 2008 and 2024.
According to WIPO, it is in contrast to merely 1% for investments in tangible assets. According to the research, the fastest growing categories of intangible asset investments include software and databases, which grew by more than 7% a year between 2013 and 2022. It also pointed out that these investments were made at the same time and were probably motivated by the current growth in artificial intelligence.
According to the report, AI has already started to raise more intangible investments in things like data sets required to train AI systems, as well as investments in concrete infrastructure like chips, servers, and data centers.
According to Sacha Wunsch Vincent head of WIPO’s department for economics and data analytics, “people think that we are already in the middle of the AI (boom), but we are actually just at the beginning”.
SOURCE: DAWN NEWS
