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Supporting Investment in Knowledge Capital, Growth and Innovation

image of Supporting Investment in Knowledge Capital, Growth and Innovation

Knowledge-based capital (KBC) results from business investment in non-physical assets such as R&D, data, software, patents, new business models, organizational processes, firm-specific skills and designs. This publication brings together the results of a two-year programme of work at the OECD on New Sources of Growth and the role of Knowledge-based Capital (NSG-KBC). This work shows that business investment in KBC is a key to future productivity growth and living standards. In many countries, business investment in KBC has increased faster than - and in some countries significantly exceeds - investment in physical capital (like machinery). To promote long-term growth and the jobs of tomorrow, governments must ensure that framework conditions, institutions and policies facilitate business investment in KBC. Emerging economies are also making concerted efforts to help their businesses accumulate KBC. This book sets out policy analyses and recommendations in the fields of: innovation; taxation; entrepreneurship and business development; corporate reporting; big data; competition and measurement.

English

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Measuring knowledge-based capital

This chapter describes recent advances in the measurement of knowledge-based capital (KBC) and the contribution of the OECD to this work. Important areas of progress relate to the international harmonisation of estimates and methodologies and the publication of comparable figures at the macroeconomic and industry levels. The OECD has also addressed the measurement of assets for which guidelines do not exist, and proposed an experimental task-based methodology to estimate investment in organisational capital (OC). Results suggest that investments in OC are almost twice as large as previously estimated and that many occupations, in addition to managers, contribute to its accumulation. OECD work on research and development (R and D) has focused on aligning the various existing measures of investment and on proposing output-based measures that capture the economic and technological value of inventions through the use of patent data. The results point to the sources of differences in investment estimates and show that the quality of R and D output varies substantially within and across technologies and industries. Finally, the OECD has estimated depreciation rates for R and D and OC and found that these assets remain valuable for longer than previously assumed. Overall, the estimates suggest the growing importance of investments in KBC assets and their relation to productivity growth, although causal links, complementarities and spillover effects remain to be addressed.

English

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