Working Paper: CEPR ID: DP6287
Authors: Jonathan Haskel; Mauro Giorgio Marrano
Abstract: We attempt to replicate for the UK the Corrado, Hulten and Sichel (2005, 2006) work on spending on intangible assets in the US. Their work suggests private sector expenditure (investment) on intangibles is about 13% (11%) of US GDP 1998-2000, with intangible investment about equal to tangible capital investment. Our work, using a similar method, suggests the UK private sector spent, in 2004, about £127bn on intangibles, which is about 11% of UK GDP. The implied investment figure is around £116bn (10% of GDP) which is about equal to UK investment in tangible assets. Of the £127bn expenditure, (in round numbers) about 15% is spent on software, about 10% on scientific R&D, almost 20% on non-scientific R&D (design, product development etc.), about 14% on branding, about 20% on training and the rest on organisational capital.
Keywords: intangible assets; investment; organisational capital; R&D; training
JEL Codes: E1; E22; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Investment in intangible assets (E22) | UK GDP (E20) |
| Investment in intangibles (approx. £127 billion) (E22) | Tangible capital investment (approx. £116 billion) (E22) |
| Breakdown of intangible investment (software, R&D, branding, training) (E22) | Total intangible investment (E22) |