“The US economy will officially become 3 per cent bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties and spending on research and development. Billions of dollars of intangible assets will enter the gross domestic product of the world’s largest economy in a revision aimed at capturing the changing nature of US output.” Source: FT
The definition of an “intangible asset” is: “An asset that is not physical in nature. Corporate intellectual property (e.g. items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today’s marketplace …” Obviously intangible assets do not represent the value of any equipment or buildings.
The last major revision occurred in 1999 when IT software development was added to the GDP. Today’s move, reminds the experienced investor of the internet company bubble, witnessed in the late 90s and the beginning of the 21st century, where we saw profitable operations and value all over place.
The critical difference with the past is that today there is not only one sector concerned, but the entire industry. Given the history and the larger picture of today’s world, this move and its timing is strange, isn’t it? So, who at the end is going to pay for the bill?