Cross-border Payments for the Use of Intellectual Property (IP) surpass 1 trillion US Dollars in 2022, a record high

June 28, 2024

By Davide Bonaglia and Sacha Wunsch-Vincent (WIPO)

Cross-border payments for intellectual property surged to more than $1 trillion in 2022.
The United States remains the top IP exporter with over $128 billion, followed by Germany, Japan, and China.
Switzerland leads in generating revenue from IP exports as a share of their total trade, followed by Japan and The Netherlands.
Viet Nam (+75%), Indonesia (+72 percent) India (+34 percent), and Brazil (+6 percent) experienced significant increases in IP exports compared to 2021.

Most recent figures for 2022 show that cross-border payments for the use of intellectual property (IP) surpassed the 1 trillion US dollars (USD) mark, reflecting a doubling from 2010, and growing by roughly 5.5 percent a year 2010-2022 (compound annual) (see Figure 1). As a result, IP payments now amount to 7.5 percent of total commercial services trade in 2022. This growing global trade in IP reflects how global production has been re-organized over the past decades^[1]. As production has become more globally widespread, intangible assets such as technological knowledge, software, and know-how have led to an intensification in the cross-border trade of ideas^[2].

Figure 1: Cross-border payments for the export and import of intellectual property, in USD, 2005-2022

Source: Authors based on Trade in Services by Mode of Supply (TISMOS), World Trade Organization (WTO)

The landscape of global economic interactions experienced notable shifts during and after the COVID-19 pandemic. IP payments and receipts declined to 867 billion USD in 2020 during the pandemic - a 7 percent decrease compared to the previous year. In 2021, there was a significant recovery, with cross-border IP payments experiencing a strong rebound of 17 percent. By 2022, IP-related exchanges stabilized.

In 2022, the United States (US) made the most money by selling IP abroad, having received close to 130 billion USD (see Table 1). Germany, the number two IP exporter, saw a slight decrease in its IP exports compared to 2021 (-14 percent), from almost 60 billion USD in 2021 to nearly 53 billion USD in 2022. Within the top 10, China is the only middle-income economy, occupying the 9th position, a significant rise from the 22nd place it held in 2010. Within the top 50, India occupied the 26th position with 1.2 billion USD, Brazil the 31st with 745 million USD, Türkiye the 39th with 234 million USD, and Argentina the 43rd with 205 million USD.

Table 1: Ranking of the world’s top-50 IP exporters, in USD billion, 2022

Source: Authors based on Trade in Services by Mode of Supply (TISMOS), World Trade Organization (WTO)

Considering the proportion of IP exports as share of the overall total trade, Europe stands out as the leader, with 11 of its economies ranked in the top 15 (see Table 2). In 2022, Switzerland has the highest share of revenue generated from IP exports, accounting for roughly 5.5 percent of its total trade, followed by Japan at 4.7 percent and The Netherlands at 4.3 percent.

Table 2: GII 2024 preliminary ranking of the top 50 World’s Leading IP Exporters as percentage of Total Trade, 2022

Source: Authors based on Trade in Services by Mode of Supply (TISMOS), World Trade Organization (WTO)

Figure 2a below showcases the leading economies by total IP exports across Europe, Northern America, Southeast Asia, East Asia, and Oceania. Germany and the Netherlands lead the ranking in Europe, while in East Asia, Japan, China, and Singapore are the top performers in terms of IP exports.

Figure 2a: Global leaders in IP exports by Europe, Northern America, and South East Asia, East Asia and Oceania in 2022, in billion USD

Source: Authors based on Trade in Services by Mode of Supply (TISMOS), World Trade Organization (WTO)

In Central and Southern Asia, the leader is India, followed by Pakistan and Iran (Islamic Republic of). In Latin America and the Caribbean, Mexico, Brazil, and Argentina occupy the top three spots. In Northern Africa and Western Asia, the leading economy for IP exports is the United Arab Emirates, followed by Israel and Cyprus. Finally, in Sub-Saharan Africa, the leading countries for IP exports are South Africa, Kenya, and Ghana.

Figure 2b: Global leaders in IP exports by Central and Southern Asia, Latin America and the Caribbean, Northern Africa and Western Asia, and Sub-Saharan Africa in 2022, in billion USD

Source: Authors based on Trade in Services by Mode of Supply (TISMOS), World Trade Organization (WTO)

Background

The Global Innovation Index includes a pillar on Knowledge and Technology Outputs, with threes sub-pillars on knowledge creation (6.1), knowledge impact (6.2) and knowledge diffusion (6.3). The sub-pillar 6.3 includes one indicator Intellectual Property Receipts, % Total Trade (6.3.1) that measures the charges for the use of intellectual property (i.e. receipts) as percentage of the total trade, and computed as an average of the three most recent years.

Receipts are between residents and non-residents for the use of proprietary rights (such as patents, trademarks, copyrights, industrial designs, including trade secrets and franchise) and for licenses to reproduce or distribute (or both) intellectual property embodied in produced originals or prototypes (such as copyrights on books and manuscripts, computer software, cinematographic works and sound recordings) and related rights (such as for live performances and television, cable or satellite broadcast). Total trade is defined as the sum of total imports of code G goods and code SOX commercial services (excluding government goods and services not included elsewhere) plus total exports of code G goods and code SOX commercial services (excluding government goods and services not included elsewhere), divided by 2.

Data for the GII draws on the World Trade Organization (WTO) Statistics - Global Services Trade Data Hub. Trade in Services by Mode of Supply (TISMOS) dataset.