World Intangible Investment Report 2026

Syllabus:GS3/Economy/Science and Technology

In News

The World Intangible Investment Report 2026, launched by World Intellectual Property Organization and Luiss Business School, reaffirms India’s emergence as a global innovation powerhouse.

World Intangible Investment Highlights (WIIH) 2026

• It  is a joint publication of the World Intellectual Property Organization (WIPO) and Luiss Business School (LBS).
• It covers 29 economies accounting for around 57% of global GDP in nominal terms and about 45% on a purchasing power parity basis.
• The largest investors in absolute terms are the United States, Japan and Germany, whereas the most intensive investors are Sweden, the US and France.
  •  India, Japan and the Philippines saw the strongest growth.
• The 2026 edition also underscores the strategic importance of brands and looks at how the relationship between artificial intelligence (AI) and intangible investments is changing.

Major Findings 

• Intangible Investment Surpassing Tangible Investment :  Intangible investment continues to outstrip tangible investment (e.g. buildings and machinery) by a wide margin.
  • Intangible investment in 29 economies exceeds USD 10 trillion in 2025.
    • From 2008 to 2025, intangible investment grew at an annual rate of 3.5%, more than three times faster than tangible investment (0.98%). 
  • Country Patterns : 
    • In Japan, Canada, Germany: Investment in intangibles continued to increase while investment in tangibles stagnated or declined, mirroring a structural shift toward knowledge assets.
    • In the US, France, UK: Intangible investment grew consistently faster than tangible investment, although both grew. 
    • Both India and the Philippines recorded fast growth in both tangible and intangible investments, with infrastructure investment still growing faster.
    • Brazil was the exception where intangible investment increased and tangible investment decreased.
• Fastest-growing category  :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%.
  • Artificial intelligence (AI) is expected to reinforce the trend by increasing investment in software, data, organisational capital and research. 
• Share in GDP  : Since 1995, the share of intangible investment in GDP has increased in all economies, and at the aggregate level, it now exceeds that of tangible investment (12.8% vs. 11.8% of GDP in 2025).
  • Sweden is the leader in the most intangible-intensive economy, followed by the United States and France.
  • India’s formal-sector intangible investment was 10% of GDP (2023) and on a steady climb, though tangible investment (19.3% of GDP) is still higher as infrastructure development continues.

India Specific Data 

• 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%
• 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.
• India remains a tangible asset-intensive economy, but 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
• 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.
• 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
• 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. 

Importance of Intangible Investment

• Driving Productivity & Innovation : Intangibles like custom software, artificial intelligence algorithms, and organisational workflows are scalable in ways that physical machinery are not.
  • They allow firms to produce more output with the same physical infrastructure.
• Moving Up the Value Chain: To go beyond being an outsourcing hub for low-cost labour, India is investing in intellectual property (IP), R&D and original design to develop high-value products and proprietary technologies.
• Powering the Digital & AI Economy: Data, databases and digital platforms are completely intangible. They are crucial to India’s booming fintech, e-commerce, SaaS sectors.
• Building Brand Equity: In today’s AI-generated noise-filled global marketplace, strong corporate brands and trademarks build consumer trust and ensure long-term customer loyalty.
• Intangibles Powering Job Creation: High-skilled, high-paying jobs in tech, design and research

Challenges 

• Undercounting & Measurement Errors. Older accounting frameworks (e.g., national statistics and balance sheets) measure investments in R&D or employee upskilling as “expenses” rather than “capital assets.”
  •  That obscures the real economic value being created.
• Concentrated Asset Distribution: The intangible boom in India is heavily skewed towards software and IT services. 
• Low Gross Domestic Expenditure on R&D :  India’s total spending on R&D is low relative to GDP as compared with developed economies like the US
• Difficulty of Valuation and Financing: In the past, banks and other financial institutions have demanded physical collateral – land, machinery and other assets – before they will lend money.
  • In India, debt financing against intangible assets such as patents or software code remains a very complex and risky exercise.
• Cyber & IP Vulnerabilities: Non-physical assets are extremely vulnerable to cyber-attacks, data breaches and theft of intellectual property, requiring robust cyber-defences that many MSMEs lack.

Steps Taken by India

• Digital Public Infrastructure (DPI): The remarkable success of India Stack (UPI, Aadhaar, ONDC, Account Aggregator) has created a vast, open-source, intangible foundation for businesses to develop software and databases.
• National Research Foundation (Anusandhan NRF): To channelise structured funding to academic and private research, strengthening India’s R&D ecosystem.
• Intellectual Property Reforms: The Controller General of Patents, Designs and Trademarks (CGPDTM) has been modernised with a drastic reduction in patent processing times.
• Startup India & PLI Schemes: The Production Linked Incentive (PLI) scheme, with its emphasis on manufacturing, demands technological localisation and design, compelling companies to make large investments in domestic organisational know-how and IP.
• National Strategy for Artificial Intelligence– Focus on building indigenous AI datasets, compute capacity and algorithmic research to capture the AI boom.

What more needs to be done?

• Revise Accounting & Statistical Standards: Align national accounting standards to modern standards to explicitly recognise intangibles as Gross Fixed Capital Formation (GFCF).
  • This will provide policymakers a realistic picture of the drivers of the economy.
• Encourage IP-backed Financing: RBI and SEBI to set up regulatory mechanisms and standard valuation guidelines to allow financial institutions to take patents, copyrights and software safely as collateral for business loans.
  • Expand the scope of investment to diversify the intangible portfolios beyond software services to deep-tech R&D, biotech, creative designs and building global brands
• Enhance cybersecurity legislation: The DPDP (Digital Personal Data Protection) framework is now implemented.
  • The next step is to enhance the corporate data governance and cybersecurity infrastructure to safeguard proprietary digital resources.
• Industry-Academia Collaboration: Close the gap between research at the university and commercial usage, making sure academic R&D easily translates into marketable intellectual property

Source :Air