Investment and growth in OECD economies is increasingly driven by intangible or knowledge-based capital (KBC). In many OECD countries, firms now invest as much or more in KBC as they do in physical capital such as machinery, equipment and buildings. This shift reflects a variety of long-term economic and institutional transformations in OECD economies.
The rise of KBC creates new challenges for policymakers, for business and for the ways in which economic activity is measured. Many policy frameworks and institutions are still best suited to a world in which physical capital drove growth. New thinking is needed to update a range of framework conditions – from tax and competition policies to corporate reporting and intellectual property rights.
To address the rise of KBC – and contributing to the OECD’s work on new approaches to economic challenges – the OECD has embarked on a two-year horizontal project entitled "New Sources of Growth: Intangible Assets". For OECD member countries and key non-members, this work aims to:
Provide evidence of the economic value of KBC as a new source of growth; and
Improve understanding of current and emerging challenges for policy, in such areas as taxation, competition, intellectual property rights, personal data, and corporate reporting.
The project draws on expertise from across the OECD Secretariat and Committees.
In the context of the New Sources of Growth project, this high-level policy-oriented conference aims to present, review and build on the findings of the OECD’s two-year programme of work examining the role of knowledge-based capital in growth. The conference will be opened by OECD Secretary-General Angel Gurría, who will present the project’s main findings.
Bringing together a group of leading academics and policy analysts, in an informal setting, this workshop aimed to examine conceptual and policy frameworks for knowledge-based (intangible) capital. A deeper understanding of knowledge-based assets is a critical step toward advancing economic policy. Better understanding can help governments meet new economic challenges, avoid systemic dysfunction, and promote informed development and growth – rather than merely fine-tuning the status quo. The deliberations feed into the conclusions of a wide-ranging two-year OECD project on knowledge-based capital and growth.
Over recent years significant progress has been had on a number of fronts to better understand how knowledge-based capital is generated, valued and propagated. Extensive efforts by the research community to replicate the seminal work of Corrado, Hulten and Sichel, using a growth accounting framework, have resulted in broadly comparable figures on the scale of business investment in knowledge-based capital and the role of this investment in macroeconomic performance. Coordination has occurred among the INNODRIVE and COINVEST projects (INNODRIVE and COINVEST are two projects that were funded by the European Commission under the 7th Framework Program and which addressed the measurement of knowledge-based assets at the macro level for a number of EU countries. COINVEST (2008-2010) covered eight European countries. INNODRIVE (2008-2011) covered the EU27 countries and Norway). This has led to harmonised macro estimates for the United States and a number of European countries. These data have been published online as the INTAN-Invest database. The INTAN-Invest estimates are the authors' own elaboration of work previously conducted under INNODRIVE, COINVEST and an ongoing effort by the United States’ Conference Board. However, while harmonisation has proved less complicated for software and R&D, for which international measurement guidelines exist, this has not been the case for other assets in the CHS framework, especially those in the category of economic competencies (including brand equity, firm-specific human capital, networks joining people and institutions, and organisational know-how). OECD work has therefore recently focused on improving the measurement of economic competencies and innovative property (patents, copyrights, designs and trademarks).
This report outlines the scope of the work, its policy relevance and interim findings (at the half-way point of project implementation). The project will be launched at events in early 2013, combined with a set of publications that will include a synthesis report for the 2013 OECD Ministerial Council Meeting.
Assets you cannot touch lie behind successful innovations, from the iPhone to Airbus and even designer furniture. What are they and how can policy make a difference? This OECD Observer article untangles these "intangibles".
This conference aimed to raise public awareness about the growing importance of intangibles in driving economic growth and to provide a road map for identification of key research and policy areas that can help governments and businesses develop growth strategies that adopt a broad concept of innovation and thereby better utilise intangible assets.