Brand Value In The Global Economy

Brand Value In The Global Economy

Do we know enough about how brands impact the global economy? Is it worth having this information? Dr. Francis Gurry, General Director of the World Intellectual Property Organization (WIPO), would answer ‘No’ to the first question and ‘Yes’ to the second one. Indeed, his introduction to the recent WIPO report is quite clear: “A recognized brand is among the most valuable intangible assets. Despite this cross-cutting importance, evidence of how branding and trademark use affect economy-wide performance is still limited – especially when compared with the large volume of studies carried out on the patent innovation nexus”. Thus, the WIPO report aims at covering this gap in the research and providing an exploration of the statistics on worldwide brand and trademark investment to increase our understanding of the role these intangible assets play in coping with competition and economic change. Indeed, the report offers a captivating message for corporations that want to consider their brand strategy critically, despite it is designed to be read by policy makers.

First, estimates report that in 2011 global investments in branding were worth USD 466 billion with an increasing proportion of the total in middle-income economies such as India and China. In fact, branding investments as percentage of GDP steadily increased in China between 1998 to 2010. At the same time, US statistics report a drop in branding investments from more than 1.2% to less than 0.8% of GDP. This change is particularly significant if we consider the parallel activity in filing trademarks. Indeed, trademark filings (based on class counts) in middle-income economies represents 43% of the world wide filing activity in 2011, compared with 35% in 2006. The same statistics for high-income economies show a decrease of ten percentage points from 2006, reaching 45% of the worldwide filings in 2011. The face of branding has changed in the last two decades of globalization. As a result, there is a pressing need for experts and skilled branding personnel in expanding nations like India, China, but also in Brazil, Korea and eastern European countries. Indeed “brands and trademark retain a local character that is persistent over time, partially due to language-related factors”. This phenomenon challenges investments and expansion strategies.

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