Investments rise in data, AI, outpacing physical assets: UN
GENEVA: The purchase of physical assets was eclipsed last year by a surge in investment in intangible items such as software, data and AI, the UN said on Wednesday, describing a “fundamental shift in how economies grow and compete”.
Investment in intellectual property-backed assets grew three times faster in 2024 than investment in physical objects such as machinery and buildings, which have been hit by high interest rates and a subdued economic recovery, the United Nations’ World Intellectual Property Organization (WIPO) said in a fresh report.
The report, co-published with Italy’s Luiss Business School, showed that intangible investment across 27 high- and middle-income economies grew by about 3% in real terms last year, reaching $7.6 trillion, up from $7.4 trillion a year earlier.
“We’re witnessing a fundamental shift in how economies grow and compete,” WIPO chief Daren Tang said. “While businesses have slowed down investing in factories and equipment during uncertain times, they’re doubling down on intangible assets. This trend has profound implications for policymakers.”
He added, “Countries that understand and nurture intangible investment will be better positioned to grow and thrive in a global economy increasingly driven by technological, digital and cultural innovation.”
In 2024, the United States led in absolute levels of intangible asset purchases, investing nearly double what France, Germany, Japan and Britain pumped into such assets, WIPO said.
Sweden remained the world’s most intangible-asset-intensive economy, with such investments accounting for 16% of its gross domestic product. The United States, France and Finland followed, each with an intensity of 15% of GDP. India’s intangible investment intensity of nearly 10% put it ahead of several EU economies and of Japan.
The report indicated that investment in intangible assets showed sustained and resilient growth even during crises, swelling at a compound annual rate of around four% between 2008 and 2024, compared with just one% for tangible asset investments.
Software and databases were the fastest growing types of intangible asset investments, rising by more than seven% annually between 2013 and 2022. The report said this growth coincided with and was likely driven by the current artificial intelligence boom.
AI has already boosted investments in tangible infrastructure, including chips, servers and data centres, and the report suggested it had begun to spur further intangible investments in datasets needed to train AI systems.
“People think that we are already in the middle of the AI boom, but we are actually just at the beginning,” said Sacha Wunsch-Vincent, head of WIPO’s department for economics and data analytics.
By RSS/AFP
