Transcript Slide 1
How much does the UK invest in innovation? Jonathan Haskel Managing knowledge spaghetti, Imperial, March 2009 The transformation of the economy? • The old economy • = tangible assets, production lines • The new/knowledge economy • = Intangible assets • Software, design, R&D, know-how • Move to knowledge-intensive activities • Rise of the service sector • Innovation as a key economic driver • How well do we measure this activity? How well do we measure knowledge economy inputs? • Much focus on R&D • Official survey/tax credit definition follows Frascati • “Research and experimental development (R&D) comprises creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications”. • But exclusions are crucial: examples: • • • • • Design Market research (Much) software Training Organisational change associated with R&D • Key: measured R&D is spending on “scientific” discoveries • So retail and financial services R&D = 0 • Suggests want to broaden out R&D to measure knowledge economy spending Counting more than just scientific R&D • Count a wider range of intangible spending • Upstream: more than just R&D • Upstream spending also on • design, • software, • Creative endeavour (books, films etc.) • Downstream: associated coinvestment with commercialisation of knowldege • marketing, • training • organisational change • Overall: innovation spending on intangible assets Broader view of knowledge spend: intangible investment A. Computerized information • Computer software (bought in, own account) • Computer databases B. Scientific and creative property • Science and Eng R&D spending, usually leading to a patent/licence • Mineral exploration (mostly R&D in oil and minerals) • Artistic originals (mostly R&D in creating artistic originals) • Other product development, design, research, usually not leading to a patent/licence (I.e. non-scientific R&D spend) • product devel costs in fin svcs • architect and eng design • R&D in soc sci and humanities C. Economic competencies • Brand equity (to develop reputation capital via branding or trademarks) • Firm-specific human capital • Organizational structure (organisational capital) Summary of results • 1997: Tang invest = £81bn, knwlg invest = £76bn • 2005: Tang invest = £96bn, knwlg invest = £117bn Memo: GDP £1,500bn RBS toxic asset insurance £270bn Intan investment by type (% total) Software 14.3 Scientific R&D 7.9 9.6 0.4 Mineral exploration Copyright licenses 16.0 0.3 0.2 0.2 Financial services innovation 5.2 6.4 6.3 Purchased architectural & engineering design 6.1 2000 11.1 Own-account architectural & engineering design 2004 12.0 0.4 R&D in social sciences and humanities 0.3 Advertising 9.1 10.4 1.8 Market research 2.6 22.4 Firm-specific human capital 15.0 Organizational structure 0.0 5.0 10.0 15.0 24.3 17.8 20.0 25.0 30.0 % Research agenda • Improve measures of spending on this expanded group of assets (expand the R&D survey) • Better understand effect of this spending on GDP • Policy: better understand the market failures that might make private spending suboptimal (e.g. knowledge spillovers)