By Cate M. Elsten and Nick Hill

The “Intangible Asset Market Value” (IAMV) study conducted by the authors examines the components of market value, and specifically the role intangible assets play in corporate market capitalizations across a range of indexes around the world. We believe IAMV is a strong reflection of innovation in the greater economy. This is consistent with a Reuters article on its list of Top 100 Global Innovators which shows organizations that invest in intangible assets such as patents and research & development (R&D) continually outperform the S&P 500. As seen in Figure 1, intangible asset value has continued to grow as the major component of the S&P 500’s market cap over the past decade.