GLOBALINTO studies the impact of intangible capital on innovation and competitiveness
The project also includes seven other universities and research institutes: Aarhus University, University of Hamburg, University of Ljubljana, University of Paris Sud, the National Technical University of Athens, the Institute of Innovation Research at the University of Manchester, and Statistics Norway.
Intangible capital has become a key explanatory variable for economic growth and the development of productivity as well as for the creation of innovations and new growth sectors. The new European GLOBALINTO project will analyse how the use of intangible capital resources evolves into innovations that improve productivity. Innovation policy should be reoriented towards this purpose.
"Intangible capital includes not only research and development but also companies' leadership skills, marketing, digital skills and networking in value chains. The unique data of the project, from company personnel and its skillset to the value chains between companies, paint a broad picture of the knowledge assets of the companies and of the strengths and weaknesses of Europe. Europe needs new sources of economic growth and development of statistics for identifying know-how," says the project director Hannu Piekkola, Professor of Economics at the University of Vaasa.
According to Piekkola, one challenge in measuring intangible capital is the way intangible capital ages, that is, which parts of the knowledge and skillsets will last. Another challenge is to measure intangible capital so that it is compatible with national accounts. Many measures of intangibles such as innovation property, management, design and branding overlap with each other. However, this overlap is reduced when we know the share of personnel effort that is used to create each type of intangible assets.
"The different sub-fields of intangible capital are interwoven in such a way that research and development correlate strongly between information and communication technology and leadership skills. GLOBALINTO will shed light on these boundaries, something that is important especially in Finland, where the lack of leadership skills has often been presented as one of the obstacles for company growth," says Piekkola.
According to Piekkola, the measurement of intangible capital in companies and in finance is in need of more detailed and consistent information and methods. The new research project continues the development of these based on the INNODRIVE project, a previous EU funded project coordinated by Piekkola. INNODRIVE was chosen by external evaluator Net4Society as one of the seven EU projects that had a successful impact in the Social Sciences & Humanities among the nearly 1000 FP6 and PF7 projects.
The GLOBALINTO project analyses the relationship between intangible capital and productivity at a European level. The differences between northern and southern European countries are significant. These differences in development are influenced by the accumulation of know-how with the changing workforce, the dispersion of knowledge between small and big companies, the barriers of market entry, digitalisation, organisational skills, innovations and productivity in global value chains. It is also expected that financing constraints inhibit many of the new innovations, especially in Southern Europe, so that many growth opportunities are missed. Nordic countries may be overly oriented to R&D and exports, while new measures are required to make the business services more innovative, especially in Finland.
The research project uses country-specific company personnel data that is available to statistics centres through a remote connection. All company identifiable information in the remote data has been removed. The research data also comprises innovation surveys conducted according to the guidelines of the European Union Statistical Authority (Eurostat) for the whole of Europe and of many industry-specific datasets.
Hannu Piekkola, Professor in Economics, University of Vaasa, tel +358 29 449 8426, hannu.piekkola(at)uwasa.fi