UK Innovation Index: productivity and growth in UK industries
AbstractThis paper provides an update of the NESTA Innovation Index and tries to calculate some facts for the 'knowledge economy'. Building on the work of Corrado, Hulten and Sichel (CHS, 2005,9), using new data sets and a new micro survey, we (1) document UK intangible investment and (2) see how it contributes to economic growth. Regarding investment in knowledge/intangibles, we find (a) this is now 34% greater than tangible investment, in 2009, ÃÂ£124.2bn and ÃÂ£92.7bn respectively; (b) that R&D is about 11% of total intangible investment, software 18%, design 12%, and training and organizational capital 21% each; (d) the most intangible-intensive industry is manufacturing (intangible investment is 17% of value added) and (e) treating intangible expenditure as investment raises market sector value added growth in the 1990s due to the ICT investment boom, but has less impact on aggregate measures of growth in the 2000s. Regarding the contribution to growth, for 2000-09, (a) intangible capital deepening accounts for 26% of labour productivity growth, against computer hardware and telecommunications equipment combined (16%) and TFP (-0.4%); (b) adding intangibles to growth accounting lowers TFP growth by about 18 percentage points (c) capitalising R&D adds 0.04% to input growth and reduces ÎlnTFP by 0.02% and (d) manufacturing accounts for 47% of intangible capital deepening plus TFP.
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Bibliographic InfoPaper provided by Imperial College, London, Imperial College Business School in its series Working Papers with number 9786.
Date of creation: Jul 2012
Date of revision:
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Other versions of this item:
- Goodridge, Peter & Haskel, Jonathan & Wallis, Gavin, 2012. "UK Innovation Index: Productivity and Growth in UK Industries," CEPR Discussion Papers 9063, C.E.P.R. Discussion Papers.
- NEP-ALL-2012-10-27 (All new papers)
- NEP-EFF-2012-10-27 (Efficiency & Productivity)
- NEP-FDG-2012-10-27 (Financial Development & Growth)
- NEP-INO-2012-10-27 (Innovation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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