Germany in third place: Intangible investments are booming!

Germany in third place: Intangible investments are booming!

Germany asserts itself as one of the leading locations for investments in intangible assets. According to a study by the World Intellectual Property Organization (WIPO) and published by the German Patent and Trademark Office (DPMA), private and public actors invested a total of 602 billion US dollars (approx. 513 billion euros) in this area in 2022. This places Germany in third place among the economies examined, behind the USA and France, which lead the market.

The USA is at the top with a considerable gap to the competition, with Germany still in the running with $602 billion for 2023. These investments in intangible assets like software and research are critical because they grow faster than traditional tangible investments. Since 2008, spending on intangible assets in 27 industrialized countries and large emerging markets has increased on average more than three and a half times faster.

Weaknesses in material investments

Despite this positive development, Germany shows weaknesses when it comes to investments in physical assets. These include areas such as buildings, machinery and infrastructure, where shrinkage processes have led to recorded declines in recent years. In contrast, investments in research and development account for a significant share of all intangible investments at 32 percent, while only nine percent went into software and databases.

Compared to 1995, when these investments only made up 8 percent of the gross domestic product (GDP), they have now increased to 10.5 percent in Germany. However, in other advanced economies such as the US and UK, intangible investments represent a larger share of GDP than tangible ones.

Global trends and future outlook

The WIPO study, which was carried out in collaboration with the Italian Luiss Business School, predicts a total of 7.6 trillion dollars for intangible investments worldwide by 2024. This development represents a fundamental shift in the financing landscape and is further fueled by the increasing importance of innovation and technology.

Eva Schewior, President of the DPMA, expressed optimism about Germany's technological leadership. She emphasized that despite the decline in traditional tangible investments, the country continues to successfully invest in intangible assets. Companies are increasingly relying on intangible assets to remain competitive, which could permanently change the economic landscape.

In summary, Germany remains strong in investing in intangible assets, although challenges remain with tangible assets. These trends show how important it is for companies to focus on innovation in order to meet future challenges and secure their long-term competitiveness.

Further information about the study can be found at Branded goods magazine and at der-markt.net.