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Measuring the Other Half: New Measures of Intangible Investment from the ONS

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  • Josh Martin

Abstract

Only half of investment by firms is in physical capital, such as buildings and machinery. The other half is in intangible assets, such as branding, software and training. This has been true for the past two decades or more in the UK, but only if you step beyond the measures in the National Accounts, which include only some of the recognised intangible assets. This paper surveys ongoing work at the Office for National Statistics to develop measures of investment in intangible assets, using new insights and innovative approaches. In particular, this paper reviews developments in three areas: in-house branding investments, employer-funded training investments, and in-house investments in organisational capital. We reconsider some of the key assumptions made in the literature and propose alternative approaches to measurement. The paper concludes by considering implications of this work, and identifies some of the remaining gaps in the evidence base for measuring intangible assets.

Suggested Citation

  • Josh Martin, 2019. "Measuring the Other Half: New Measures of Intangible Investment from the ONS," National Institute Economic Review, National Institute of Economic and Social Research, vol. 249(1), pages 17-29, August.
    • Handle: RePEc:sae:niesru:v:249:y:2019:i:1:p:r17-r29
    DOI: 10.1177/002795011924900111
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    References listed on IDEAS

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    1. Sandra E. Black & Lisa M. Lynch, 2005. "Measuring Organizational Capital in the New Economy," NBER Chapters, in: Measuring Capital in the New Economy, pages 205-236, National Bureau of Economic Research, Inc.
    2. Carol Corrado & John Haltiwanger & Daniel Sichel, 2005. "Measuring Capital in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number corr05-1, January.
    3. Gary S. Becker, 1964. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, First Edition," NBER Books, National Bureau of Economic Research, Inc, number beck-5, January.
    4. Carol Corrado & John Haltiwanger & Daniel Sichel, 2005. "Introduction to "Measuring Capital in the New Economy"," NBER Chapters, in: Measuring Capital in the New Economy, pages 1-10, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Peter Goodridge & Jonathan Haskel, 2023. "Accounting for the slowdown in UK innovation and productivity," Economica, London School of Economics and Political Science, vol. 90(359), pages 780-812, July.
    2. Josh Martin & Cain Baybutt, 2022. "The 'F Words': Why Surveying Businesses About Intangibles is so Hard," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2022-20, Economic Statistics Centre of Excellence (ESCoE).
    3. Kristof Van Criekingen & Carter Bloch & Carita Eklund, 2022. "Measuring intangible assets—A review of the state of the art," Journal of Economic Surveys, Wiley Blackwell, vol. 36(5), pages 1539-1558, December.
    4. Marie Bjørneby & Simen Markussen & Knut Røed, 2023. "An imperfect wealth tax and employment in closely held firms," Economica, London School of Economics and Political Science, vol. 90(358), pages 557-583, April.
    5. King Carl Tornam Duho, 2022. "Intangibles, Intellectual Capital, and the Performance of Listed Non-Financial Services Firms in West Africa: A Cross-Country Analysis," Merits, MDPI, vol. 2(3), pages 1-25, June.

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    More about this item

    Keywords

    intangible assets; capital; investment; branding; marketing; organisational capital; intellectual property; training;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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