The concept of modern manufacturing is no longer limited to production lines and massive machinery; the global economy is witnessing a radical shift toward what is known as "intangible assets." According to a recent analysis by the Information and Decision Support Center (IDSC) of the Egyptian Cabinet, the competitive value of countries and companies is now measured by their ownership of software, data, design, and research and development, rather than just the capacity for physical production.
Data based on reports from the World Intellectual Property Organization (WIPO) indicates that investments in intangible assets have seen accelerated growth, exceeding $10 trillion in 2025 across 29 major economies, representing 57% of global output. Interestingly, the growth rate of these investments significantly outpaces that of traditional physical investments, by a factor of up to 3.6 times.
Fundamental Shifts: From Products to Services
The analysis explains that this shift is based on two main technical and economic trends:
- Servicification: Where services such as data management, logistics, and design become essential, indispensable inputs in the process of producing and exporting goods.
- Servitization: A shift in business models where companies do not merely sell a product but integrate services such as smart maintenance contracts and data-driven performance guarantees, making value tied to ongoing service rather than a one-time sale.
What is Practically Changing in the Concept of Industrial Value?
This transformation necessitates a comprehensive redefinition of industrial policies, as localizing factories is no longer sufficient to increase competitiveness. The real change lies in three areas:
First: Expanding the concept of local content; instead of focusing only on physical components, localization strategies must include software, engineering design, and applied research. Second: Integrating the service sector into industrial policy; by improving infrastructure for telecommunications, finance, and logistics, which could reduce global trade costs by massive amounts. Third: Empowering small and medium-sized enterprises; by providing digital platforms and technological testing and certification centers that compensate for their lack of internal R&D resources.
New Levels of Industrial Power
The analysis expects future industrial power to be concentrated around three interconnected levels, and the ability to combine them will determine the winners in the global race:
- Physical production capacity: Including factories, energy, and supply chains.
- Knowledge production capacity: Represented by research and development, software, data, and intellectual property.
- Capacity to integrate knowledge into industry: Through effective institutions, specialized human skills, and innovation systems.
The analysis warns that countries that limit themselves to the first level (physical production) will remain trapped in the stages of assembly and low-value production, while countries that succeed in integrating knowledge with production will be the ones capable of localizing technology and creating high-skilled jobs.