Measuring Investment in Intangible Assets

Investment in intangible assets is recognized as a major source of growth, innovation, and value creation in the modern economy but there is so far no standardized approach to the measurement of intangibles. The chapter lists many data sources that can be useful in (partially) shedding light with the emphasis on past surveys. The first survey to address a broad list of intangibles was the 2009 UK Investment in Intangible Assets Survey and the latest international effort was the 2020 Global into survey. Despite the usefulness of surveys to capture various types of intangibles and their impact, surveys face several measurement challenges, detailed in the chapter. Intangibles are often created in-house, over multiple periods, and rarely registered in accounting systems. Given the absence of accounting rules, available data on intangibles from own-account investment is usually scarce. At the same time, intangibles are mobile, they are easily moved across businesses and countries, but their pricing often serves profit shifting and does not reflect real values. The chapter also contains an empirical analysis showing a direct effect of intangible assets on productivity and an indirect effect of intangibles that encourage participation in global value chains, that in turn improves production efficiency. Reflecting on the way ahead, authors expose the importance of official statistics to take a more active role: highlight the need for methodological improvements including clear conceptual definitions, good question(naire) design, and relevant unit(s) of observation; discuss data needs for national accounting, policymaking, and research in economics; and consider the potential of assessing the stock of intangible assets. To improve the measurement of intangibles, recommendations for future action call for a concerted effort in harmonizing definitions, considering current and future data needs, and striving for an adjustment in corporate accounting rules to better recognize intangible assets.