Investments rise in data and AI worldwide, surpassing traditional spending on physical assets, according to a new UN report. According to the World Intellectual Property Organisation (WIPO) of the United Nations, in collaboration with Luiss Business School of Italy, there was a profound change in the patterns of economic development.
In 2024, software, data, and AI investments grew 3 times as fast as investments in physical assets such as machinery and buildings. The change indicates the decline in the interest in tangible assets because of the high interest rates and slow economic recovery. Instead, companies resorted to digital tools and intellectual property to enhance growth.
According to the data provided by WIPO, last year, intangible investments in 27 high- and middle-income economies increased by 3% in real terms. The overall expenditure was 7.6 trillion dollars compared to 7.4 trillion dollars in 2023. Daren Tang, the Director General of WIPO, termed this as a paradigm shift in the way economies develop and compete.
He observed that firms cut down on factory and equipment expenditure when they were uncertain. Nevertheless, they paid more attention to intangible assets. Tang said this trend has grave implications on policymakers.
Sweden is the Intangible Asset Intensity Leader
WIPO emphasized that countries that invest in intangible assets will be in a better position to expand in a digital and technology-driven world. The US led the pack in overall intangible investment, almost doubling the amount spent by Germany, France, UK and the Japan.
The US was the most value-intensive economy, but Sweden was the most intangible-intensive economy. These investments constituted 16 percent of the GDP of Sweden. The US, France and Finland were close behind with 15% of GDP in intangible investment.
India was also exceptional. Its intangible investment intensity was almost 10%, surpassing a number of countries in the European Union and Japan. The trend indicates the increasing influence of emerging economies in the digital transition.
Good Performance Amidst World Crises
The report established that intangible assets have been increasing steadily even in economic downturns. These investments increased by 4 percent per year between 2008 and 2024. The growth in tangible assets, on the other hand, averaged just 1 percent annually during the same time.
The fastest growth of intangible assets was in software and databases. Between 2013 and 2022, these categories increased by more than 7 percent annually. Software & data spending directly fuels the worldwide boom in artificial intelligence.
AI has also led to the development of physical infrastructure such as servers, chips and data centres. Nevertheless, the report emphasized that AI also leads to investment in non-material aspects such as training datasets. They are essential in developing sophisticated machine learning systems.
Sacha Wunsch-Vincent, the head of the economics and data analytics division at WIPO, said that we are at the beginning of the AI era. He said, people believe that we are already in the middle of the AI boom, but we are only at the start.
An Appeal to Prospective Policy
WIPO feels that this worldwide change should be met with immediate policy adjustment. Countries that identify and encourage investment in intangible assets will be strategically ahead. To remain competitive, economies should concentrate on data, AI, and intellectual property.
The digital innovation has become the way nations develop. The ones who will not adjust will be left behind in a culture, creativity, and technology-driven world. The direction is obvious: intangible investment is not optional anymore, it is a necessity.
