CHICAGO, March 5, 2015 – Ocean Tomo the intellectual capital merchant banc™ firm released findings from its Intangible Asset Market Value Study of the composition of equity market values. As reported by Geoff Colvin of Fortune Magazine, the components of S&P market value data for the start of 2015 reveals the implied intangible asset value of the S&P 500 grew to an average 84% by January 1, 2015 a growth of four percentage points over ten years.
Ocean Tomo Chief Executive Officer, James E. Malackowski commenting on the study notes that the U.S. market valuation of intangibles may now be at its peak. “Recent realization of the significant impact of the American Invents Act combined with fundamental economic changes suggests to me that we are likely to see a slight rebalancing towards tangible assets in the coming decade.”
Data from the US Department of Commerce, Bureau of Economic Analysis (BEA) substantiates the prospect for a correction. In July of 2013, the BEA began recognizing expenditures by business, government and non-profits on research & development (R&D) as fixed assets, recording them as investments in gross domestic product (GDP). As the data below demonstrates investments in tangible assets (Structures & Equipment) have grown at a rate of 13.1% (2012-2014) while investments in intellectual property products (R&D spending including software), have grown at a rate of 9.6%.
While many have forecasted increased capital expenditures by companies, Mr. Malackowski points to several dynamics influencing the prospect of further and accelerated re-investment in structures & equipment, one of which is re-shoring. “Fueled by a three-fold wage increase in China versus 2000, the gap is closing on the hidden costs of off-shoring – packaging, shipping, duty, the carrying cost of inventory, among others. Lower energy costs in the U.S. along with exploding domestic investment in 3D printing, or additive manufacturing, will also fuel a return to tangible domestic investments. Combined, such change is poised to measurably alter the manufacturing landscape capping the long-term rise of intangibles” explains Malackowski.
About Ocean Tomo, LLC
Established in 2003, Ocean Tomo, LLC, the Intellectual Capital Merchant Banc™ firm, provides industry leading financial products and services related to intellectual property including financial expert testimony, valuation, strategy consulting, proprietary research products, investment services, risk management products, innovation management services and transaction brokerage. Ocean Tomo assists clients – corporations, law firms, governments and institutional investors – in realizing Intellectual Capital Equity® value broadly defined.
Our Opinion, Management, and Advisory Services are built upon more than two decades of experience valuing intellectual property in the most rigorous of venues – State, Federal and international courts. Our financial, market and technical experts provide a unique understanding of the contributory value of proprietary innovation. This is the cornerstone of our business. This insight permeates every practice.
Headquartered in Chicago, Ocean Tomo has offices in Greenwich, Houston, Irvine, San Francisco and Seattle. Subsidiaries of Ocean Tomo include: Ocean Tomo Risk Management, LLC; Ocean Tomo Asset Management LLC; OTI Data Networks, LLC; Patent Marking, LLC; and Ocean Tomo Capital, LLC – publisher of the Ocean Tomo 300® Patent Index family. Ocean Tomo is the founder of the Intellectual Property Exchange International (IPXI), Inc., creator of the live public open cry auction marketplace for intellectual property as well as the exclusive source for Ocean Tomo Ratings™.