Modern economies make major investments in intangible knowledge assets such as data assets, research and development and brand equity. These investments lack solid physical forms. Nevertheless, they are crucial to modern business performance and create assets that are used repeatedly in production processes for many years.
A new study, titled "Data, Intangible Capital and Economic Growth in Canada," shows that intangible investments were important for labour productivity growth in Canada from 2000 to 2019, but their contribution was lower than that in the United States and Europe.
Productivity growth is essential for improving living standards. Labour productivity, which measures the output of the economy per hour worked, can increase from firms' investments in tangible and intangible assets, upgrading workers' skills, and multifactor productivity growth (that is, innovation and technological progress that are not embodied in investments).
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