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

Published online by Cambridge University Press:  01 January 2020

Josh Martin
Josh Martin*
Affiliation:
Office for National Statistics
*
E-mail: Josh.Martin@ons.gov.uk
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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.

Keywords

intangible assetscapitalinvestmentbrandingmarketingorganisational capitalintellectual propertytrainingE22J24O34M53
Type
Research Articles
Information
National Institute Economic Review , Volume 249 , August 2019 , pp. R17 - R29
Copyright
Copyright © 2019 National Institute of Economic and Social Research

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Footnotes

The author recognises contributions from participants at the Economic Statistics Centre of Excellence (ESCoE) 2019 annual conference, and other previous ESCoE events and workshops. Research support from Sam Shilton, Matt Eddolls, and Jay Ahmed is gratefully acknowledged, as are comments on an earlier draft by Katherine Kent, Richard Heys, Joe Murphy and Rebecca Riley. Any omissions or errors are the author's responsibility. The views expressed in this paper are those of the author and not necessarily those of the ONS.

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