In previous postings, I've discussed the papers by Corrado, Hulten and Sichel (C-H-S) on measuring the intangible economy in the US. Last summer, Mauro Giorgio Marrano, Jonathan Haskel and Gavin Wallis (M-H-W?) released a similar analysis of the UK economy - What Happened to the Knowledge Economy? ICT, Intangible Investment and Britain's Productivity Record Revisited. Their study comes to the same basic conclusions (in the UK context) as the C-H-S studies. Economic activity and productivity were greater than previously thought -- once intangibles are treated as an investment rather than an expense.
The paper also makes an interesting observation about the differences between the US and the UK. R&D makes more of a contribution to productivity in the US; design and training make more of a contribution in the UK.
That tracks other information I've had over the years. As I've mentioned before (see "U.K. Leads; U.S. Lags"), the UK has put a great amount of emphasis on design. Training and skills development has been such an important part of their innovation strategy that they combined their Department of Trade and Industry and Department for Education and Skills into a new Department for Innovation, Universities and Skills (DIUS).
The studies by C-H-S and now by M-H-W are invaluable aids to both understanding the economic situation and framing appropriate policy responses. They will be featured as an up coming one day conference this summer at the National Academy of Sciences (which I am helping to put together) -- more on that later.
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