Khaberni - The Jordan Strategy Forum issued a paper within the "In Brief" series titled: "Intangible Assets: Between the Capability Trap and Opportunities for Transformation," shedding light on "intangible assets" and some observations from the World Intellectual Property Organization (WIPO) report titled: "Key Global Trends in Investing in Intangible Assets 2025."
The Forum noted in its paper that intangible assets represent non-physical assets such as creative ideas, innovations, expertise, and reputation.
These assets include various forms of intellectual property rights such as patents, trademarks, visual identity, designs, copyrights, trade secrets, software, and more.
The Forum explained that although it is difficult to determine the value of intangible assets compared to tangible or physical assets like buildings and machinery, they are no less important, serving as a fundamental driver in the business sector and the economy in terms of adding value, enhancing innovation, and improving competitive advantage, thereby driving sustainable growth.
The Forum reviewed in the paper some findings from the World Intellectual Property Organization (WIPO) report titled: "Key Global Trends in Investing in Intangible Assets 2025," which included 26 economies, mostly advanced economies forming together about 52 percent of the global Gross Domestic Product (GDP), indicating that the total investment in "intangible assets" has consistently exceeded the levels of investment in "tangible assets" since 1995.
The paper clarified that the share of investments in "intangible assets" as a percentage of global GDP rose from 10.3 percent in 1995 to 13.6 percent in 2024, surpassing the share of tangible assets, which reached 11.1 percent in 2024.
The Forum mentioned in its paper that the global value of intangible assets is estimated at approximately USD 79.4 trillion, noting that 79 percent of the estimated global value of intangible assets is not reflected in companies' financial reports, according to the Global Intangible Finance Tracker (GIFT) 2024 report by Brand Finance.
The Forum also pointed out that "despite the vital role of intangible assets in driving and stimulating economies, they are still not included or adequately measured in official statistics. Measuring them is a fundamental step in understanding these assets, determining their size, and their impact on growth which enables informed decision-making and the formulation and adoption of effective policies."
Conversely, the Forum noted that neglecting to account for these assets or not measuring them accurately and precisely can lead to inefficient resource allocation, reduced investment levels, and thus negatively impact the quality of decisions and policies.
The Forum added that intangible assets are a fundamental driver for stimulating innovation and raising the efficiency and competitiveness of economies, although they are difficult to copy compared to tangible assets. Nonetheless, they possess a significant potential for dissemination and successfully reflect cumulative successes on the performance of the companies that own them.
The Forum concluded its paper by emphasizing that many developing countries face the risk of falling into what is known as the "capability trap"; a stagnation in knowledge and technological capability where countries fail to move towards high-value-added activities reliant on quality and innovation.
To avoid falling into such a trap, the Forum recommended working to improve the levels of education and its quality (especially higher and technical education), developing digital and legislative infrastructure, encouraging innovation, engaging extensively in global value chains, and encouraging expatriates to participate in knowledge transfer and local capacity building.
