Funded by the Seventh Framework Programme of the European Union

Paper by Matilde Mas and Javier Quesada at the Innovation Funding Committee (COTEC Foundation), Madrid (Spain)

The Cotec Foundation for Innovation welcomed yesterday Matilde Mas and Javier Quesada, who presented the paper Intangibles y Crecimiento Económico (Intangibles and Economic Growth) , to the Innovation Funding Committee, an opportunity for Cotec trustees to participate in the analysis of innovative activities in our economy.

The meeting was chaired by the Vice-President of Caixabank, Antonio Massanell, with the participation of more than forty companies such as Telefónica, Banco Santander, El Corte Inglés, OHL, Iberdrola or Fundación ACS, among others. Institutions belonging to the board of trustees were also present, such as the Centro para el Desarrollo Tecnológico Industrial, IVACE, the regional governments of Aragón, Asturias, Galicia and Extremadura, and the local governments of Madrid and Valencia.

In their presentation, the Ivie researchers emphasized the relevance of intangibles, such as R&D, organizational capital or training, in the economic development and productivity of a country. In fact, one of the conclusions derived from the paper is the the insufficient endowment of intangible assets in Europe and, especially, in Spain compared with the United States. According to the authors, this difference explains the lower labor productivity growth in the European Union compared with other leading economies, such as the United States.

In addition, Quesada and Mas shared with Cotec Foundation members some positive results obtained from investing in intangibles. In particular, they allow raising GDP levels between 5% and 6%, as well as productivity.

Other conclusions from the paper are:

  • There is a strong relationship between the share of intangible assets and differences in living standards among countries
  • Underinvestment in intangibles may account for the sudden stall in Spain’s process of economic convergence with the European Union, and the European Union with the United States
  • Some advanced economies such as the United States or United Kingdom already invest more in intangibles than tangibles
  • Investing only in tangible capital is not enough for Spain to grow and create jobs. It becomes vitally important to invest in intangibles, since this marks the greatest differences with its European neighbor countries, which are distancing away from Spain

June 15th, 2016