Insights

Investment in intangible assets that underpin the knowledge or learning economy, such as intellectual property (IP), research, technology and software, and human capital, has risen inexorably over the past quarter century, and the COVID-19 pandemic appears to have accelerated this shift toward a dematerialized economy. Are we seeing the start of a new stage in the history of capitalism based on learning, knowledge, and intellectual capital? As economies recover from the pandemic, could a wave of investment in intangible assets breathe new life into productivity and unlock more growth potential?

New research uses sector-level data and the results of a new survey of more than 860 executives that reveal that “top growers”—companies in the top quartile for growth in gross value added, a measure of economic growth—invest 2.6 times more in intangibles than low growers, companies in the bottom two quartiles. The research uses the survey and sector-level data from the INTAN-Invest database to explore the correlation between intangible investment and the productivity of sectors, economies, and firms, and to discover the formula for the effective deployment of intangible assets to drive growth.1 The research takes the broader definition of intangibles outlined by economists Jonathan Haskel and Stian Westlake, who include economic competencies such as advertising and brands, marketing research, organizational capital, and training. This more expansive definition of intangibles appears more relevant to the role they increasingly play in companies, sectors, and economies.