India tops intangible asset investment growth, says global report

New Delhi: India emerged as the world's fastest-growing major economy in investment in knowledge-based assets in 2022-23, with spending on software, research, brands and other intangible assets rising 7.9%, according to a World Intellectual Property Organization (WIPO) report.

The World Intangible Investment Highlights 2026 report said India recorded the highest year-on-year growth in intangible investment among the 15 largest economies covered, ahead of Japan (4.8%), the Philippines (4.6%) and the US (4.4%) during 2022-23.

While India remains a tangible asset-intensive economy, the report said its investment in knowledge-based assets is rising rapidly alongside traditional capital expenditure. India's gross capital formation rose from 32% of GDP in 2021 to 33% in 2023, it said.

In absolute terms, India's intangible investment was at $78 billion in 2023, exceeding that of several European economies, including Denmark, the Czech Republic and Finland, the report said.

The report defines intangible investment as spending on assets such as software and databases, research and development (R&D), organizational capital, brands, design, new financial products and other intellectual property products. It said these assets are increasingly important in supporting innovation, productivity and economic activity.

Dominated by software, databases

India's investment profile is dominated by software and databases, which accounted for nearly 45% of the country's total intangible investment in 2023, the highest share among all economies covered in the report. Organizational capital comprised 21.8%, R&D 12.7%, brands 9.3%, and design 11% of India's total intangible investment.

India's software and databases have expanded at a compound annual growth rate of 8.2% between 2013 and 2023, it said.

Globally, software and databases were the fastest-growing category of intangible assets during 2013-23, up 7.3%, followed by organizational capital at 4.9% and brands at 4.4%, the report said.

The report said artificial intelligence (AI) is expected to reinforce this trend by increasing investment in software, data, organisational capital and research. While recent AI spending has largely focused on physical infrastructure, such as chips and data centres, the report said its longer-term economic impact will increasingly depend on investment in intangible assets that enable firms to reorganize processes, develop proprietary data and strengthen innovation capabilities.

Investing in brands

India also ranked among the faster-growing economies in investment in brands. Brand investment expanded at a CAGR of 7.2% between 2013 and 2023, placing India behind Luxembourg, Lithuania and Denmark but ahead of several advanced economies. The report said fast-growing middle-income economies, including India, are investing in brands as they seek to move up value chains and strengthen their market position.

The report noted that around 62% of the total intangible investment is not captured in official national accounts, as categories such as organizational capital, brands, design, operating models and skills are generally not recognized as investment under existing accounting frameworks.

The report is jointly published by WIPO and Luiss Business School using the Global INTAN-Invest Database, which covers 29 economies accounting for around 57% of global GDP in nominal terms and about 45% on a purchasing power parity basis.