Value of intellectual property products

Intellectual property investment is projected to reach $61.1 billion in 2025, representing growth of 1.5% over the previous year and marking 31.2% expansion above 2019 pre-pandemic levels. This sustained performance demonstrates that IP investment has proven remarkably resilient compared to traditional capital expenditure, maintaining consistent growth momentum even as machinery and equipment investment experienced sharp contractions throughout 2023-2025. The current investment level reflects businesses' ongoing commitment to digital transformation initiatives, research and development programs, and knowledge-based assets that are increasingly viewed as essential for competitive positioning rather than discretionary enhancements.

However, the modest 1.5% growth in 2025 represents a significant deceleration from the exceptional expansion rates achieved during 2021-2022, signaling that IP investment growth is normalizing after pandemic-driven acceleration. This moderation reflects multiple factors, including elevated interest rates that increased capital costs despite recent cuts, profit margin compression that reduced cash available for innovation spending, and cautious business sentiment amid trade policy uncertainty that is causing companies to defer some discretionary R&D initiatives. The near-stagnant growth in 2024 (0.04%) followed by weak 2025 expansion suggests IP investment may be entering a transitional period where the extraordinary digital transformation urgency of the pandemic era gives way to more measured, selective investment aligned with tighter economic conditions.

The past five years witnessed the most rapid IP investment expansion in Canadian history, with expenditure surging 31.7% from $46.4 billion in 2020 to a projected $61.1 billion in 2025. This period of exceptional growth was catalyzed by the pandemic, which served as a forcing function that accelerated digital transformation timelines by years and elevated IP investment from strategic enhancement to survival imperative. Companies that had contemplated gradual technology adoption over five-to-ten year horizons compressed these transitions into months, driving unprecedented investment in software, digital infrastructure, and process innovation.