The global economy is increasingly being driven by ideas rather than physical assets, with intellectual property emerging as the biggest creator of value.
Opening a panel discussion on intellectual property, intellectual property rights lawyer Safir Anand said intangible assets today account for the overwhelming share of global wealth.
"If you take all the cash in the world, every building, plant and machinery, gold, commodities and raw materials and assume that adds up to 100, the question is how much of that 100 is intangible," Anand said.
Citing global estimates, Anand said that over 90% of the world's wealth now resides in intangible assets such as intellectual property, brands, technology, data and processes.
"Some of the most credible companies, including Apple, even argue that the number could be closer to 99%," he added, noting that the most valuable companies today rely more on intellectual property than on physical infrastructure.
Intellectual property, Anand explained, goes beyond just patents and trademarks. It also includes designs, copyrights, trade secrets, business models and operational systems that give companies a competitive edge.
Value Lies With IP Owners
Manish Chokhani, director at Enam Holdings, said the shift toward intellectual property explains why companies that own technology or platforms capture the bulk of economic value.
"Throughout civilisation, wealth power has flowed to people who had knowledge and guarded that knowledge," Chokhani said.
He pointed out that India has historically contributed knowledge to the world from yoga and Ayurveda to ancient texts but in the modern economy, the ownership of intellectual property determines who captures value.
"For the last several decades, India largely functioned as a processor nation," Chokhani said. "We produced goods for someone else's specifications or wrote software for global technology companies."
The result, he said, is that the largest share of profits goes to those who own the underlying product, technology or brand. "All the software services companies put together may not make as much money as one Microsoft," he said, highlighting the gap between service providers and intellectual property owners.
A similar pattern can be seen across industries. Chokhani noted that airlines globally earn far less than aircraft manufacturers such as Boeing and Airbus, which control the underlying technology. "The value transfer goes to the person who owns the product, the brand or the IP," he said.
Learning From China's Evolution
Chokhani also highlighted China's economic transformation as an example of how countries move up the value chain. In the 1990s, China focused on becoming the world's largest manufacturing hub. Largescale production itself became a form of competitive advantage. Over time, however, China shifted its focus toward innovation and intellectual property.
"Today China is saying we want to own the IP," Chokhani said, pointing to emerging technologies and companies as examples of this transition.
Pharma Shows Economics of IP
Jayakumar, MD and CEO of Prime Securities, said the pharmaceutical sector offers a clear example of how intellectual property drives profits.
He cited the example of the cancer drug Revlimid, where Indian pharmaceutical companies such as Dr. Reddy's, Cipla, Lupin and Aurobindo Pharma produced generic versions after regulatory carve-outs.
The original drug sold at around $500 per unit, while Indian manufacturers were able to produce it at roughly $3-$4. "The combined profit of these companies over three years was about $2.5 billion on sales of roughly $3 billion," Jayakumar said.
Over time, the price of the drug dropped sharply to around $4, illustrating how generic competition reshapes pricing in pharmaceuticals. With strong balance sheets and growing cash reserves, he said Indian pharma companies are now in a position to invest more in innovation and move further up the value chain.
Investors Look for Defensible Advantages
Ace investor and Kedua Securities CEO Vijay Kedia said intellectual property is not always about patents. It can also include systems, data and distribution capabilities that competitors find difficult to replicate. "One thing I look at is whether the product can be replicated easily," Kedia said.
Even in industries where the product itself is simple, companies can build strong intellectual advantages through operations and data.
He cited Asian Paints as an example. "Paint is not a complicated product and many companies can manufacture it," Kedia said. "But Asian Paints built a powerful data system that tells them which colour sells in which village and at what time."
That deep understanding of customer behaviour, he said, became a form of intellectual property that helped the company dominate the market.
India's Innovation Gap
Despite its growing startup ecosystem, India still trails global peers in research and innovation investment.
According to Jayakumar, India spends about 0.6% of GDP on research and development, compared with around 3.5% in China and nearly 5% in the United States. Similarly, only about 5% of Indian startups focus on deep technology, compared with roughly 35% in China.
Experts say increasing investment in research, encouraging innovation and building globally competitive intellectual property will be crucial if India wants to capture more value in the global economy. As Anand summed up, the future of economic power will increasingly depend on ownership of ideas rather than ownership of assets.
"In today's world, intellectual property is the real wealth," he said.
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