correct, R&D investments have contributed more to growth in GDP than tangible capital investments over the past 50 years. And, according to the preliminary results, their relative contribution is on the rise: R&D accounted for 4.5 percent of growth in GDP between 1959 and 2002 and 6.7 percent for the period between 1995 and 2002 (Robbins and Moylan, 2007).
On June 23, 2008, the Board on Science, Technology, and Economic Policy, jointly with the Committee on National Statistics, held a workshop to examine measurement of intangibles and their role in the U.S. and global economies and to discuss a range of policy-relevant topics:
What intangibles are and how they work.
How intangible investments compare and contribute to growth in the United States and other countries.
How intangibles are created and used by firms.
The variety and scale of emerging markets in intangibles.
What government statistical agencies are doing in the area.
What the government’s role should be in supporting markets and promoting investment in intangibles.
In the keynote address to the workshop,1 Senator Jeff Bingaman (D-NM) presented his perspective on why policy makers and lawmakers should care about improving measurement of intangible asset investments and nurturing their development. Citing research by BEA and the Federal Reserve Board, he emphasized the point that R&D, and intangible assets more broadly, significantly affect worker productivity, GDP growth, and, in turn, the economic well-being of the nation’s individuals and families. He challenged the workshop’s participants to continue work to measure these economic factors as accurately as possible so that Congress and other leaders will be adequately informed to enact the right policy incentives—with regard to creating parity in tax incentives between tangible and intangible output and to appropriate funds for the right mix of basic and applied research—for today’s knowledge-based economy. Accurate measurement of investment in intangible assets and implementation of policies to optimize their value, he observed, are great technical challenges, ones that are especially important as the nation works to remain globally competitive.
In the opening session, key terms were defined and their role in the modern economy identified. Irving Wladawsky-Berger (IBM and Massachusetts Institute of Technology) sketched out the salient factors in the U.S. economy’s transition from an industrial to a knowledge economy. He described how the advent and proliferation of the Internet and other information technologies marked a key point in that transition. He argued that economic progress and growth now hinge on asset development that is intangible in nature. In particular, he focused on the
Full text of the address is reproduced in Box 1-1.