India Outpaces Global Peers in Intangible Asset Investment Amid AI-Driven Growth The country's intangible investment intensity, now close to 10 per cent of its GDP, places it ahead of many European Union nations as well as Japan

As the world accelerates towards a knowledge-based economy, India has emerged as one of the fastest-growing investors in intangible assets, according to the latest World Intangible Investment Highlights report released by the World Intellectual Property Organization (WIPO) and Italy's Luiss Business School.

In 2024, intangible investments—spanning software, databases, intellectual property, branding, and organisational know-how—grew three times faster globally than tangible investments in physical infrastructure such as machinery and buildings. This shift underscores how digital and intellectual capital is becoming the foundation of economic competitiveness, especially in the wake of the artificial intelligence (AI) boom.

India, in particular, stands out for recording the fastest annual growth rate in intangible investment between 2011 and 2022, at an impressive 6.6 per cent. The country's intangible investment intensity, now close to 10 per cent of its GDP, places it ahead of many European Union nations as well as Japan. This highlights India's transformation into a digitally-driven, innovation-focused economy.

"While businesses around the world are pulling back on physical infrastructure during uncertain times, they are doubling down on software, data, and AI capabilities. India's investment trajectory reflects a strong national focus on future-ready economic drivers," the report notes.

Globally, intangible investment reached USD 7.6 trillion in 2024, with India playing a key role in the surge. The report reveals that software and databases are the fastest-growing category of intangible assets expanding at over 7 per cent annually between 2013 and 2022, driven largely by the AI revolution.

The AI boom has ushered in a two-phase investment pattern: first, capacity installation involving AI hardware and cloud infrastructure; followed by structural transformation, where firms embed AI into core operations and retrain their workforces. While countries like the United States are already seeing a macroeconomic impact of AI-related tangible investments, India's contributions are currently more prominent on the intangible front especially in software development and data infrastructure.

Notably, intangible assets now make up a growing share of GDP worldwide, accounting for 14 per cent in 2024 compared to 11 per cent from tangible assets. In India, this mirrors a strategic pivot towards innovation, organisational capital, and knowledge-based growth.

Cecilia Jona-Lasinio, co-author of the report and Professor at Luiss Business School, emphasised the policy implications, "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."

The report also cautions that while intangible assets are central to economic value creation, they remain poorly understood and under-measured, especially in emerging economies. Accurate valuation and data are essential to ensure informed policymaking and efficient capital allocation.