This report measures industry investment in knowledge – or intangible assets – and the contribution to productivity growth.

Key findings:

• The UK’s investment in intangible assets has been greater than that for tangible assets since the early 2000s. In 2008 it stood at £137 billion, as opposed to £104 billion tangible investment.
• Innovation and knowledge capital contribute significantly to economic growth.
• The most innovative sectors at the industry level are financial services, business services and manufacturing.

The findings set out in Driving Economic Growth are a valuable and timely contribution to the important debate around how the UK can achieve sustainable and balanced economic growth.

Driving Economic Growth is based on a modification of the pilot Index published in 2009, providing greater accuracy in the measurement of the investments in intangibles and the contribution to productivity growth.

It includes an industry breakdown highlighting the importance of manufacturing in overall productivity growth as well as the share of investments in intangibles within consumer and business services.

Authors:
Jonathan Haskel, Peter Goodridge, Annarosa Pesole, Gagan Awano, Mark Franklin and Zafeira Kastrinaki