Toward Better Measurement of Innovation and Intangibles

While all nations are likely to invest into tangible assets according to their GDP data, none of them presently comprises a comprehensive assessment of commercial investment into intangible assets in their official financial records. However, most experts agree that intangible assets (which are an essential support of the innovations) are vital elements of the contemporary economy. In the USA, some specialists consider intangible assets investments as equal to tangible assets investments. The article under discussion comprises the current attempts of the Bureau of Economic Analysis (BEA) to improve measurement of investment in different intangibles.

The article covers the abstract issues of the innovation evaluation and intangible assets investments; the logic supporting the state accounting techniques of investment measurement; the various kinds of intangible assets, comprising technological and non-technological ones; the current measurement data and details on BEA’s plans.

Basically, regarding intangibles costs as investment might have two impacts on the product accounts and national income: it could raise GDP and GDI while investing in intangibles. It could also add a new contribution, and the cost of the capital services produced by that capital could further be evaluated in the income account.

The article discusses the extensive types of spending considered as intangible assets concentrating on two issues:the spending types assessed as investment (the service lives of assets should last more than 1 year), and the existing information to create these measures.

Spending for industrial and innovative property is bigger than those for computer information, making around a third of entire expenses on intangibles. These estimations are generally the production of research and development but also comprise innovative property, such as the creation of new movies and other types of entertainment and, more widely, non-technological expenses for the development of new product.

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