This contribution is drawn from the discussions of a forum that examined the strategies adopted by the European Commission and the member states for the intensification of innovative activities. It analyses business investment in intangible capital using a new internationally comparable dataset in the EU27 created within the FP7 project INNODRIVE. First, it finds that the EU’s innovation agenda would be well advised to switch its benchmark criteria from a sole focus on R&D to a focus on overall investment in intangible capital, in particular, on investments in economic competencies. Second, it finds that today’s national accounting framework seems to be ill-suited for identifying the ongoing transition of European economies towards knowledge economies. Without identifying the full range of intangibles as an investment in Gross Fixed Capital Formation, the overall levels of capital investment of European economies are too low.
This contribution is drawn from the discussions of a forum that examined the strategies adopted by the European Commission and the member states for the intensification of innovative activities. It analyses business investment in intangible capital using a new internationally comparable dataset in the EU27 created within the FP7 project INNODRIVE. First, it finds that the EU’s innovation agenda would be well advised to switch its benchmark criteria from a sole focus on R&D to a focus on overall investment in intangible capital, in particular, on investments in economic competencies. Second, it finds that today’s national accounting framework seems to be ill-suited for identifying the ongoing transition of European economies towards knowledge economies. Without identifying the full range of intangibles as an investment in Gross Fixed Capital Formation, the overall levels of capital investment of European economies are too low.