The lead in the FT today is that putting intangibles into the US national accounts raises US GDP by 3%. What does the UK picture look like?
1. One change in the US is to incorporate artistic originals, that is, spending on creating movies, books etc. That is already in the UK accounts, but not measured so well. If we adopt new methods, we have an increase in the UK GDP too by about £1.7bn, here (this is updated work using new methods for 2011).
2. Another change is to count R&D spend as an investment. For the UK, if we add private R&D spend, that raises UK GDP by about £15.5bn.
3. So these two together would raise UK market sector output by about 1.7% and GDP by about 1%.
4. Incorporating a fuller range of intangibles (design, training, marketing, business process re-engineering) raises UK market sector value added by about 11% and GDP by about 6%. Latest UK data are here, and international data are at www.intan-invest.net.
5. Our work also suggests that neglecting intangibles can explain part of the UK productivity puzzle.
(Thanks to @johnvanreenen for linking to me on this, after a weekend teaching, I was going to take the day off....)