Since 2017, Ocean Tomo has calculated and reviewed the intangible asset market value (“IAMV”) of the S&P500 index components. Between 1995 and 2015, the share of intangible asset market value increased from 68% to 84%. In July, Ocean Tomo updated the IAMV Study to investigate the economic effects of the novel coronavirus. We find that COVID-19 has accelerated the trend of increasing IAMV share, with intangible assets now commanding over 90% of the S&P500 market value. This trend holds for the S&P Europe 350 index as well, albeit to a lesser extent, with an increase from 71% in 2015 to 74% in 2020.
Given that the coronavirus has affected all countries to some extent, Ocean Tomo also investigated the effects COVID-19 has had on Asian market values. We find that, in China, Japan, and South Korea, COVID-19 has resulted in a decline in IAMV share in the Shanghai Shenzen CSI 300, the Nikkei 225, and KOSDAQ Composite Index, respectively. The IAMV share in China and Japan have dropped marginally (less than 5%) since 2015, while the KOSDAQ IAMV has dropped almost 20% in the last five years.
While part of this is explained by reporting differences and higher volatility compared to the S&P500 IAMV, South Korea has also been notably lauded for its success in controlling the outbreak within its borders, while never fully locking down. The economic effects associated with its more successful pandemic response than its regional (and global) neighbors could have had more severe consequences for intangible asset values. In addition, the KOSDAQ started with a much higher share of IAMV in 2015, with strong tailwinds in the semiconductor and shipping industries coming out of the 2007-2008 financial crisis.
To learn more, download the Intangible Asset Market Value Study here.
To explore this topic and its implications for your global IP assets and strategies, please contact Matt Johnson (+1 312 327 8188 | Matthew.Johnson@jsheld.com) for further assistance.