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A newly released study conducted by the World Intellectual Property Organization (WIPO), a UN agency based in Switzerland, reveals that “intangible capital” such as branding, design and technology nearly accounts for one third of the value of manufactured products sold around the world.
With case studies focusing on coffee, solar panels and smartphones the report “World Intellectual Property Report 2017: Intangible Capital in Global Value Chains” clearly demonstrates how intangible capital contributes twice as much as buildings, machinery and other forms of tangible capital to the total value of manufactured goods.
In addition, the income from intangibles amounting to the impressive total of USD 5.9 trillion in 2014, has increased by 75 % from 2000 to 2014 in real terms.
As WIPO Director General Francis Gurry stated at the press launch: “Intangible capital will increasingly determine the fate and fortune of firms in today’s global value chains. It is behind the look, feel, functionality and general appeal of the products we buy and it determines success in the marketplace”.
The groundbreaking new study underscores the need for companies around the world for developing an effective IP strategy, since:“Intellectual property, in turn, is the means by which companies secure the competitive advantage flowing from their intangible capital.”