Investments in Intangible Assets and Australia’s Productivity Growth — Sectoral Estimates
AbstractThis Productivity Commission staff working paper (by Paula Barnes) examines sectoral investment in intangible assets in Australia following on from a previous paper on an examination of intangibles assets in the market sector as a whole. It highlights some significant issues relating to the measurement of intangibles and their contribution to productivity, finding that estimates of intangibles at the aggregate level mask considerable sectoral differences. In recent years increased attention has been given to the contribution to economic growth of intangible assets such as knowledge, firm-specific skills and better ways of doing business. But most intangibles are treated as current expenses in official statistics, rather than as assets — despite the fact that they provide services in more than one period. This makes it difficult to examine their role in the economy. It leads to an understatement of investment in the economy and may also affect measures of productivity growth. This paper addresses two questions: does the importance of intangibles as part of total investment vary across sectors?; and does the exclusion of many intangibles from investment measurement affect the measures of sectoral economic growth and productivity? The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.
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Bibliographic InfoPaper provided by Productivity Commission, Government of Australia in its series Staff Working Papers with number 103.
Length: 166 pages
Date of creation: Jul 2010
Date of revision:
intangible assets; sectoral investment; productivity; assets; human capital; R&D; research and development; brand equity;
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-04-16 (Accounting & Auditing)
- NEP-ALL-2011-04-16 (All new papers)
- NEP-BEC-2011-04-16 (Business Economics)
- NEP-EFF-2011-04-16 (Efficiency & Productivity)
- NEP-HRM-2011-04-16 (Human Capital & Human Resource Management)
- NEP-KNM-2011-04-16 (Knowledge Management & Knowledge Economy)
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