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INNODRIVE (Intangible Capital and Innovations: Drivers of Growth and Location in the EU)

Completed Project


Firms and Markets

Project Management

Kurt Geppert

Project Period

March 1, 2008 - May 31, 2011

Commissioned by


In Cooperation With

University of Vaasa (FI), CEPS (BE), Statistics Norway (NO), NIESR (UK), IER (SI), ETLA (FI), EI (CZ), LUISS (IT)
It is widely recognised that intellectual assets are major determinants of the generation of innovation and thus of the enhancement of growth, employment and competitiveness of the EU. The importance of R&D and innovation is also explicitly acknowledged in the "Lisbon process". However, our knowledge of the contribution of intangibles to economic performance is still incomplete. While firms undoubtedly are at the centre of innovation and productivity growth, their activities are hard to analyse empirically. Furthermore at the macro-level the national accounts data on capital formation focus primarily on fixed investment and have only recently attempted to measure investment in intangibles such as software, mineral exploration and artistic creations. The aim of this research project is to reduce our ignorance by providing new data on intangibles and new estimates of the capacity of intangible capital to generate growth. We envisage doing this both at firm-level and at national level. At the micro-level the present project will improve our insight into the contributions of intangibles to the growth of firms by exploiting the potential of recently established linked employer-employee datasets and implementing a performance-based methodology to analyse how firms use knowledge and human capital to increase their productivity and how mobile workers react to these processes. At the national-economy level we will expand the traditional growth accounting framework by including, in capital formation, estimates of the investment in intangibles which, hitherto, have been counted as current expenditure in the conventional national accounts. This research will thus explore hitherto uncharted territories in EU socio-economic research. This research project will deliver new foundations for the formulation of policies to strengthen growth and employment in the EU by providing new "beyond-the-state-of-the-art" estimates of intangibles' contribution to economic performance.

DIW Team