Global investment is increasingly flowing into intangible assets such as software, data, and AI, marking what the UN has described as a 'fundamental shift' in how economies develop and compete.

According to a new report from the World Intellectual Property Organisation (WIPO), co-authored with the Luiss Business School based in Italy, investment in intellectual property-related assets grew three times faster in 2024 than spending on physical assets like buildings and machinery.

WIPO reported that total intangible investment reached$7.6 trillion across 27 high- and middle-income economies last year, up from$7.4 trillion in 2023-a real-term growth rate of 3 percent. In contrast, growth in physical asset investment has been more sluggish, hindered by high interest rates and a slow economic recovery.

'We're witnessing a fundamental shift in how economies grow and compete,' said WIPO Director General Daren Tang. 'While businesses have slowed down investing in factories and equipment during uncertain times, they're doubling on intangible assets.'

The report highlights software and databases as the fastest-growing categories, expanding by more than 7 percent annually between 2013 and 2022. It attributes much of this trend to the accelerating adoption of AI, which requires significant investment in data infrastructure and training datasets.

WIPO also noted that the United States remains the global leader in absolute intangible investment, spending nearly twice as much as France, Germany, Japan, and the United Kingdom. However, Sweden topped the list regarding investment intensity, with intangible assets representing 16 per cent of its GDP.

The US, France, and Finland followed at 15 percent each, while India ranked ahead of several EU countries and Japan at an intensity of nearly 10 percent.

Despite economic disruptions over the past decade and a half, intangible investments have remained resilient, growing at a compound annual rate of 4 percent since 2008. By contrast, investment in tangible assets rose just 1 percent over the same period.

'We are only at the beginning of the AI boom,' said Sacha Wunsch-Vincent, head of WIPO's economics and data analytics department.

He noted that in addition to driving demand for physical infrastructure like chips and servers, AI is now contributing to sustained investment growth in data and software, cornerstones of the intangible economy.