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20 November 2017Copyright

Intangible capital generated $5.9tn to manufactured products, says WIPO

Intangible capital, such as branding, design and technology, contributed $5.9 trillion to the value of manufactured goods in 2014, a report has found.

The “World Intellectual Property Report 2017: Intangible Capital in Global Value Chains” was issued today by the World Intellectual Property Organization (WIPO).

According to the report, nearly one third of the value of manufactured products sold globally comes from intangible capital, contributing twice as much as buildings, machinery and other forms of tangible capital to the total value of manufactured goods.

Food products, motor vehicles and textiles account for nearly 50% of the total income generated by intangible capital in the manufacturing global value chains, it added.

Francis Gurry, WIPO director general, said: “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.”

One of the report’s case studies looked at the market for smartphones, where firms rely heavily on patents, trademarks and industrial designs.

Apple and Samsung dominate the market for high-end phones that cost more than $400, with market shares of 57% and 25%, respectively.

The report found that for every iPhone 7 that Apple sells for approximately $810, around 42% of the sales price is captured by Apple—“a proxy for the high returns from intangible capital in the industry”.

In the patent domain, up to 35% of all first filings worldwide may relate to smartphones, claimed WIPO, adding that the 4G cellular standard used today is associated with nearly four times more patents than the 2G standard.

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