Key findings

• Investment in knowledge (intangible assets) is greater than investment on tangible assets: the UK is increasingly moving to a knowledge-based economy
• When intangible expenditure is treated as investment, this raises growth in Market Sector Gross Value Added in the 1990s but slightly reduces growth in the 2000s
• Adding the contribution of an increasingly educated workforce, innovation has contributed 73 per cent of growth in labour productivity between 2000 and 2007

This report forms a central part of Nesta's pilot Innovation Index.

It presents the interim findings of the Growth Accounting workstream, which measures spending on private sector investment in innovation and its contribution to productivity growth.

This interim report builds on previous work on intangible asset spending and growth.

Authors

Jonathan Haskel, Tony Clayton, Peter Goodridge, Annarosa Pesole, David Barnett, Graeme Chamberlin, Richard Jones, Khalid Khan, Alex Turvey