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Author Clayton, Tony ♦ Dal Borgo, Mariela ♦ Haskel, Jonathan
Source EconStor
Content type Text
Publisher Institute for the Study of Labor (IZA)
File Format PDF
Language English
Subject Domain (in DDC) Social sciences ♦ Economics
Subject Keyword Innovation ♦ productivity growth ♦ Innovation ♦ Indexberechnung ♦ Messung ♦ Vergleich ♦ Produktivität ♦ Sozialprodukt ♦ Verarbeitendes Gewerbe ♦ Großbritannien ♦ Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence ♦ Investment; Capital; Intangible Capital; Capacity ♦ Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
Abstract We (a) propose an implementable innovation index, (b) relate it to existing innovation definitions and (c) show whole-economy and industry-specific results for the UK market sector, 2000-2005. Our innovation measure starts by observing that we could get more GDP without innovation by simply duplicating existing physical capital and labour (e.g. adding a second aircraft and crew on an existing route). Thus we propose to measure innovation as the additional GDP over and above the addition existing physical capital and labour. In our measure this is the contribution to GDP growth of market sector investment in knowledge (or intangible) capital. This contribution is measured from company spending on knowledge/intangible assets and TFP growth. We relate our measure to the literature on innovation definitions, TFP, creative industries and hidden innovation. We implement it for six UK market sector industries, 2000-2005, combining with output and tangible investment data from the EUKLEMS database. Our main findings are as follows. Over 2000-2005, market sector labour productivity grew at 2.74% per annum, of which the contribution of knowledge capital, our innovation measure, was 1.24% pa. In turn, manufacturing accounted for about 60% of this latter figure. If one includes increase in labour skill deepening (0.45% pa) as innovation, then innovation contributed 61% (=(1.24+0.45)/2.74)of labour productivity growth over the period.
Part of series IZA Discussion Papers x4021
Learning Resource Type Article
Publisher Date 2009-01-01
Publisher Place Bonn
Rights Holder