India emerges a front-runner in global innovation intensity

India has rapidly expanded its intangible investments and intellectual property, surpassing major global economies in growth. Notably, it ranked fifth in trademark applications and sixth in patents globally by 2022, with a significant 5-Year CAGR of 11.5% in patent filings in 2022-23.

By 2019, intangible investments in India had reached over 10% of its GDP. This figure was comparable to the EU-22 average and exceeded Japan’s 9%, reflecting a high level of investment intensity relative to India’s stage of development.

Source: Canva

India has experienced remarkable growth in intangible investments and intellectual property over recent years, marking a significant presence on the global stage. Between 2011 and 2020, India outpaced many major global economies in the expansion of intangible assets. This period saw impressive growth in sectors such as software, data, and domestic brands, surpassing the rates of traditional economic powerhouses like the US, France, Germany, and the UK.

By 2019, intangible investments in India had reached over 10% of its GDP. This figure was comparable to the EU-22 average and exceeded Japan’s 9%, reflecting a high level of investment intensity relative to India’s stage of development. This milestone underscored the growing importance of intangible assets in the Indian economy.

In 2020, India’s position on the global stage was further solidified when it ranked 14th among 26 advanced economies for absolute levels of intangible investments, situated between Denmark and ahead of Finland and Portugal. This ranking highlighted India’s increasing role in the global economy.

In 2022, the World Intellectual Property Organization (WIPO) released new data highlighting India’s achievements in intellectual property. India ranked fifth globally for trademark applications and sixth for patent filings. Notably, this report was the first to include data on India’s intangible investments, showcasing the country’s significant contributions in areas such as research and development, software and data, design, brands, and reputation. Additionally, India’s annual filings exhibited a 5-year compound annual growth rate (CAGR) of 11.5%, exceeding global averages, according to the IP India report for 2022-23.

Source: IP India Annual Report 2022-23

The report highlighted India’s ongoing excellence in intangible investments and further emphasized that growth in sectors like software, data, and domestic brands continues to position India as a major player in the global intangible investment landscape.

Today, India’s advancements in intangible investments reflect its expanding influence in global innovation and intellectual property. The country’s high growth rates and substantial investment in intangible assets distinguish it on the world stage, illustrating the growing recognition of intellectual property’s crucial role in economic development. India’s achievements in this sector not only highlight its emerging status as a global leader but also its commitment to fostering innovation and intellectual property.

Moreover, a significant opportunity can be identified in Intellectual Property financing which stands as a pivotal financial innovation, allowing IP holders to convert their intangible assets into immediate capital. Methods for securing such financing include licensing, collateralization, securitization, and outright sale. This approach is especially beneficial for emerging research and development (R&D) ventures, which often face challenges in obtaining funding from traditional banks due to the lack of tangible assets for collateral. By easing access to credit markets, IP financing enables creators to quickly recover R&D costs, fostering innovation and economic growth.

The rising trend of IP financing mirrors the increasing dominance of intangible assets in today’s economy. For instance, physical assets make up only about 4% of Amazon’s net worth and 6% of Apple’s. India, as the third-largest startup hub globally, stands to gain significantly from increased recognition and utilization of IP financing, which can enhance capital acquisition and stimulate economic progress.

The 161st Report of the Rajya Sabha Parliamentary Committee on Intellectual Property has called for legislative changes to better support IP as collateral. Similarly, the National IPR Policy has aimed to facilitate IP securitization and its use as collateral through enabling legislation. As India continues to expand its intangible investments and intellectual property, integrating IP financing into the broader financial framework could further bolster its role in global innovation and economic development.