intangibles and cultural and creative industries

[ 1 ]

Intangibles and Cultural and Creative Industries

Matilde Mas & Javier QuesadaUniversidad de Valencia & Ivie

Seminario InternacionalEconomía Regional de las Actividades Creativas y los

Servicios Innovadores

Universidad de Alcalá, 25 y 26 de junio, 2015

[ 2 ]

INDEX

1. Intangible Assets. An Overview

2. Two projects related to intangibles:• SPINTAN• Telefonica Foundation

3. Intangibles and Cultural and Creative Industries. A tentative approach.

4. Final Remarks

[ 3 ]

INDEX


2. Two projects related to intangibles:• SPINTAN• Telefónica Foundation


4. Final Remarks

[ 4 ]

MotivationRobert Solow (1987) statement about computers could be rephrased as: “Whileknowledge economy is all around us, it is still hard to see it in the official statistics”.Since Solow’s remark, important efforts have been made to capture the knowledgeeconomy in the (official) statistics.

Milestones: The new way of Measuring Capital, and thus Productivity, taking into account

the distinction among types of assets (OECD Manuals 2001a, 2001b, 2009)

Relevant projects: EU/LA/WORLD KLEMS; Productivity Database (OECD)

The recognition by SNA of Software, Databases and a few more intangibles assets, and more recently R&D, in National Accounts.

The distinction between ICT and non-ICT assets and of ICT producing sectors

Corrado, Hulten & Sichel’s (2005, 2009) proposal to expand NA boundaries to include a selected group of intangible assets

Relevant projects: COINVEST, INNODRIVE, INTAN-Invest, KBC (OECD), SPINTAN

[ 5 ]

Corrado, Hulten & Sichel’s proposal

They cut through the conceptual problem of defining intangible assets by referring to a standard inter-temporal framework that leads to the conclusion that “any use of resources that reduces current consumption in order to increase it in the future […] qualifies as investment”.

Then, all types of capital should be treated symmetrically, for example, “investment in knowledge capital should be placed on the same footing as that of investment in plants and equipment”.

A convenient consequence of the CHS approach and their emphasis on the symmetric treatment of all assets is that one does not have to worry too much about defining “intangibles” by way of specific characteristics. It is more important to reason in terms of capital goods and to check whether spending activity meets the test of being an outlay now to enhance future consumption.

[ 6 ]

Classification of Intangible assetsIntangible capital asset typesComputerized information

1. Software

2. Databases

Innovative property

3. Mineral exploration

4. R&D (scientific)

5. Entertainment and artistic originals

6. New products/systems in financial services

7. Design and other new products/systems

Economic competencies

8. Brand equity

a. Advertising

b. Market research

9. Firm-specific resources

a. Employer-provided training

b. Organizational structure

[ 7 ]

The major challenges in capitalizing intangibles Intangibles are largely invisible and hard to count:

• Companies often do not have exact metrics to separate expenditure on intangibles assets from other expenses.

Intangible investments are often produced within the company and therefore do not represent a market transaction:• However, an increasingly large share of intangibles are traded

through markets which allow to impute prices for within-company production and transactions.

Intangibles are often not a direct or continuous input to current production:• Greater emphasis on product innovations represents a shift

away from Solow’s to Schumpeterian approach to growth. Intangibles are largely non-rival and their benefits often not

appropriable:• While violating marginalist principles at micro-level, the

principles are close enough to the reality of market economy.

[ 8 ]

Consequences

The main consequences of including (some) intangibles as investment, instead of following the NA practice of treating them as intermediate consumption goods, are:

1. Gross Value Added (GVA) will increase by the same amount that the (new) intangible investment.

2. Thus, the level of labour productivity will also increase.3. The real rate of growth of GVA when intangibles are

included can either increase, decrease, or stay (more or less) constant with respect to the GVA as conventionally measured.

4. Growth accounting results are modified. The inclusion of intangibles assets in investment reduces the contribution of TFP growth.

[ 9 ]

INDEX




4. Final Remarks

[ 10 ]

SPINTAN project (www.spintan.net) The SPINTAN project is a competitive project funded by the 7th Framework

Programme of the EC.

It will run from December 1st 2013 to December 1st 2016

It aims at extending both the theoretical and the empirical approach -as carried out by CHS (2005, 2009)- in order to include Public Sector intangibles.

Four objectives:1. Building up a Public Sector Intangibles Database for a wide set of EU

countries, supplemented with some big non-EU countries.

2. Analyze the impact of Public Sector intangibles on innovation, well-being and smart growth (including education, research and innovation and the creation of a digital society).

3. Analyze the spillover effects of intangibles and their interactions with other forms of capital (specially ICT).

4. Pay special attention to the consequences of austerity policies in view of the expected recovery.

[ 11 ]

SPINTAN project

Smart Public Intangibles: SPINTAN

Participant organisation name CountryIvie Instituto Valenciano de Investigaciones Económicas SpainNIESR National Institute of Economic and Social Research UKLUISS Lab of European Economics ItalyIstat Istituto Nazionale di Statistica ItalyIC Imperial College Business School UKTCBE The Conference Board Europe BelgiumOECD Organisation for Economic Cooperation and Development FranceZEW Centre for European Economic Research GermanyDIW Deutsches Institut für Wirschaftsforschung Germanywiiw Vienna Institute for International Economic Studies AustriaFORES Forum for Reforms, Entrepreneurship and Sustainability SwedenKOPINT Kopint-Tárki Konjunktúrakutató Intézet Zrt. Hungary

[ 12 ]

SPINTAN project

Two Main References:

1. Methodological:• Carol Corrado, Jonathan Haskel, and Cecilia Jona-Lasinio

(2015): Smart Public Intangibles: SPINTAN Framework and Measurement Guidelines. Mimeo.

2. On Measurement Issues:• Fabio Bacchini, Roberto Iannaccone, Massimiliano Iommi and

Cecilia Jona Lasinio (2015): Estimates of Intangible Capital in the Public Sector: Data Sources and Database Structure. Mimeo.

[ 13 ]

INDEX




4. Final Remarks

[ 14 ]

Telefónica Foundation project Matilde Mas, Javier Quesada (Dirs.) (2014): Intangibles en la

Nueva Economía (Ariel & Fundación Telefonica)

Country: Spain Period: 1995-2011 Private sector of the economy Sectoral dissagregation: 24 sectors

• Agriculture• Mining• Manufacturing (12 sectors)• Construction• Private services (9 sectors)

[ 15 ]

Telefónica Foundation. Sectoral dissagregationIndustrial classification and correspondence with CNAE 2009/NACE Rev. 2. Ivie’sestimation

Industries CNAE 2009 / NACE Rev. 21 Agriculture, forestry and fishing 01-032 Mining and quarrying 5-93 Food products, beverages and tobacco 10-124 Textiles, wearing apparel, leather and related products 13-155 Wood and paper products; printing and reproduction of recorded media 16-186 Coke and refined petroleum products 197 Chemicals and chemical products 20-218 Rubber and plastics products, and other non-metallic mineral products 22-239 Basic metals and fabricated metal products 24-25

10 Computer, electrical and optical equipment 26-2711 Machinery and equipment n.e.c. 2812 Transport equipment 29-3013 Other manufacturing 31-3314 Electricity, gas and water supply 35-3915 Construction 41-4316 Wholesale and retail trade; repair of motor vehicles and motorcycles 45-4717 Transportation 49-5318 Accommodation and food service activities 55-5619 Publishing, audiovisual and broadcasting activities 58-6020 Telecommunications 6121 IT and other information services 62-6322 Financial and insurance activities 64-6623 Professional, scientific, technical, administrative and support service activities 69-8224 Other service activities 90-96

[ 16 ]

SourcesIntangible capital asset types SourcesComputerized information1. Software

National Accounts (INE), EU KLEMS and BBVA Foundation-Ivie2. DatabasesInnovative property3. Mineral exploration National Accounts (INE) and BBVA Foundation-Ivie

4. R&D (scientific) Statistics about R&D activities (INE) and Technological Innovation Panel (PITEC) (FECYT)

5. Entertainment and artistic originals National Accounts (INE) and BBVA Foundation-Ivie

6. New products/systems in financial services Statistics about R&D activities (INE), EU KLEMS, Labour Force Survey (INE) and Structure of Earnings Survey (INE)

7. Design and other new products/systems SBS-Services (INE), National Accounts (INE), EU KLEMS, IO and SUT (NA, INE)

Economic competencies8. Brand equity

a. AdvertisingNational Accounts (INE), EU KLEMS, SBS-Services (INE), Infoadex, Nieto-Tamargo (1990), Pérez Ruiz (1995), WIOD and IO and SUT (NA, INE)

b. Market research National Accounts (INE), EU KLEMS, SBS-Services (INE), AEDEMO, WIOD and IO and SUT (NA, INE)


a. Employer-provided trainingContinuing Vocational Training Survey (CVTS) (Eurostat), National Accounts (INE), Labour Costs Survey (INE), Annual Labour Costs Survey (INE), Adult Education Survey (INE)


National Accounts (INE), EU KLEMS, SBS-Services (INE), FEACO Survey, WIOD, IO and SUT (NA, INE), Labour Force Survey (INE) and Structure of Earnings Survey (INE), European Union Household Panel (EUHP) (INE)

[ 17 ]

España: evolución de la inversión en intangibles El ritmo de la inversión en intangibles ha sido superior respecto a la

inversión en activos tangibles no residenciales.

La inversión en intangibles tiene una mayor capacidad de resistencia a losperíodos de crisis. La inversión en intangibles y la hipótesis delestancamiento secular.

Su incorporación a la contabilidad nacional supone un incremento del 5-6% del VAB convencional.

Inversión intangible y tangible no residencial. Sector privado. España. 1995-2011(1995=100)

Fuente: Fundación Telefónica, Fundación BBVA-Ivie y elaboración propia.

100

120

140

160

180

200

220

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Inversión intangible

Inversión tangible (no residencial)

400

450

500

550

600

650

700

750

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

VAB ampliado VAB convencional

VAB convencional y ampliado. Sector privado. España. 1995-2011(Miles de millones de euros constantes de 2005)

Fuente: INE, EU KLEMS, Fundación Telefónica y elaboración propia.

[ 18 ]

España: inversión en intangibles vs. tangibles El peso de la inversión en intangibles se ha incrementado en los

últimos 16 años, y supone ya el 35% de la inversión total: 1995: inversión intangible (27%) vs. tangible (73%)

2011: inversión intangible (35%) vs. tangible (65%)

Pese a ello, la inversión tangible casi duplica a la intangible: Inversión tangible/VAB ampliado: 13,4%

Inversión intangible/VAB ampliado: 7,1%

Peso sobre la inversión total no residencial. Sector privado. España. 1995-2011(Porcentajes)


Peso sobre el VAB ampliado. Sector privado. España. 1995-2011(Porcentajes)

0

10

20

30

40

50

60

70

80

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011



0

2

4

6

8

10

12

14

16

18

20

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011



Fuente: INE, EU KLEMS, Fundación Telefónica, Fundación BBVA-Ivie y elaboración propia.

[ 19 ]

España: comparación internacional La importancia de los intangibles en la inversión en España (29%) es

inferior a la media de la UE-15 (42%) y muy lejana a la de EE.UU. (67%).

El esfuerzo inversor de España en activos tangibles no residenciales(16% del VAB) más que duplica al de EE.UU. (7%).

Por el contrario, el esfuerzo es muy inferior en intangible: 6,5% en Españavs. 14,2% en EE.UU.

Peso de la inversión intangible en la inversión total no residencial. Sector privado. España. Promedio 1995-2010(Porcentajes)

¹ Países nórdicos: Suecia, Finlandia y Dinamarca.Fuente: INTAN-Invest, Fundación Telefónica, Fundación BBVA-Ivie

y elaboración propia.

Participación de la inversión tangible e intangible en el VAB ampliado. Sector privado. Promedio 1995-2010(Porcentajes)

29,1

41,945,8

67,0

48,742,4

27,9

55,6

0

10

20

30

40

50

60

70

España UE-15 Paísesnórdicos¹

EE. UU. Francia Alemania Italia ReinoUnido

¹ Países nórdicos: Suecia, Finlandia y Dinamarca.Fuente: INTAN-Invest, Fundación BBVA-Ivie, Fundación Telefónica, INE y elaboración propia.

15,9

13,6 14

,4

7,1

12,2 12

,9

17,2

10,3

6,5

9,8

12,1

14,2

11,6

9,5

6,7

12,6

0

2

4

6

8

10

12

14

16

18

20

España UE-15 Paísesnórdicos¹


Inversión tangible Inversión intangible

[ 20 ]

Componentes de la inversión en intangibles Las competencias económicas son el componente más importante de la

inversión intangible en España (47%), seguido de la propiedad innovadora (31%) y la información digitalizada (22%).

Las diferencias con la media de la UE-15 se deben a un menor esfuerzo inversor en propiedad de la innovación y en competencias económicas.

Composición de la inversión intangible. Sector privado. España. 1995-2011(Porcentajes)

Fuente: Fundación Telefónica y elaboración propia.

Composición de la inversión en activos intangibles. 2011¹ (Porcentajes del VAB privado ampliado)

¹ Los datos internacionales se refieren a 2010.² Países nórdicos: Suecia, Finlandia y Dinamarca.Fuente: INTAN-Invest, Fundación Telefónica y elaboración propia

0

10

20

30

40

50

60

70

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Información digitalizadaPropiedad innovadoraCompetencias económicas

1,5 1,83,1 2,3 2,6

1,1 1,02,6

2,23,6

5,25,7 4,6

4,32,4

3,43,3

5,1

4,97,3

6,3

4,5

3,5

6,9

0

2

4

6

8

10

12

14

16

España UE-15 Paísesnórdicos²


Información digitalizadaPropiedad de la innovaciónCompetencias económicas

[ 21 ]

Inversión en propiedad innovadora

La actividad diseñadora (50%), junto a la I+D (35,6%), son loscomponentes más relevantes de la inversión en propiedad innovadora.

En comparación con otras regiones, el peso de la I+D en la propiedadinnovadora es inferior: Alemania (63%), EE.UU. (52%) y UE-15 (50%).

Composición de la inversión en Propiedad innovadora.Sector privado. España. 1995-2011(Porcentajes sobre la inversión intangible total)


Composición de la inversión en propiedad innovadora. 2011¹ (Porcentajes)

¹ Los datos internacionales se refieren a 2010.² Países nórdicos: Suecia, Finlandia y Dinamarca.Fuente: INTAN-Invest, Fundación Telefónica y elaboración propia.

0

2

4

6

8

10

12

14

16

18

20

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

I+DProspec. minera y originales de obras recreat., lit. o artísticasNuevos productos/sistemas en los servicios financierosDiseño y otros nuevos productos

35,650,4

62,852,4

45,9

62,7

40,2 39,1

11,2

7,9

3,8 24,6

7,4

7,0

6,8 12,62,7

4,5

2,4

5,3

4,7

2,8

5,06,8

50,537,1

31,117,6

42,027,5

48,041,5

0

20

40

60

80

100



Diseño y otros nuevos productosNuevos productos/sistemas en los servicios financierosProspecc. minera y originales de obras recreativas, literarias o artísticasI+D

[ 22 ]

Inversión en competencias económicas La inversión en estructura organizativa (consultoría y gestión de la

organización) y en publicidad son los componentes más relevantes de las competencias económicas (70% entre ambos).

Respecto a otros países el peso de la inversión en publicidad en España es relativamente superior, mientras que la inversión en estructura organizativa es inferior.

Composición de la inversión en Competencias económicas. Sector privado. España. 1995-2011 (Porcentaje sobre la inversión intangible total)

Composición de la inversión en Competencias económicas. 2011¹ (Porcentajes)

0

5

10

15

20

25

30

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Publicidad Estudios de mercado

Capital humano de empresa Estructura organizativa

Fuente: Fundación Telefónica y elaboración propia. ¹ Los datos internacionales se refieren a 2010.² Países nórdicos: Suecia, Finlandia y Dinamarca.Fuente: INTAN-Invest, Fundación Telefónica y elaboración propia.

32,8

15,3 16,922,9

11,5 16,6 15,2 10,6

7,6

8,5 5,14,4

7,45,4

16,1

5,7

22,8

25,2 28,624,5

26,332,5

25,1

22,8

36,8

51,0 49,4 48,154,8

45,5 43,6

60,9

0

20

40

60

80

100



Publicidad Estudios de mercado

Capital humano de empresa Estructura organizativa

[ 23 ]

Inversión en intangibles por grandes sectores La inversión en intangibles cada vez tiene una mayor peso en los servicios de

mercado (comercio, ingenierías, financiero, investigación, consultorías…) en detrimento de la industria:

1995: Servicios (60%) vs. Industria (34%) 2011: Servicios (67%) vs. Industria (28%)

Esta fuerte concentración en los servicios se asemeja a la estructura en Francia y Reino Unido, pero no a Alemania (sesgo industrial) y a los Países nórdicos (modelo mixto).

Distribución de la inversión en intangibles por grandes sectores de actividad. Sector privado. España. 1995-2011(Porcentajes)

Distribución de la inversión en activos intangibles. 2011¹ (Porcentajes)

0

10

20

30

40

50

60

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Industria ConstrucciónComercio Otros servicios


27,739,2

27,4

54,4

39,1

15,5

4,9

4,7

4,5

1,4

3,3

3,3

14,6

10,6

10,6

6,9

14,3

13,5

52,345,2

57,0

37,143,1

67,5

0

20

40

60

80

100

España Paísesnórdicos²

Francia Alemania Italia Reino Unido

Agricultura Industria Construcción Comercio Otros servicios

¹ Los datos internacionales se refieren a 2010.² Países nórdicos: Suecia, Finlandia y Dinamarca.Fuente: INTAN-Invest, Fundación Telefónica y elaboración propia.

[ 24 ]

España: esfuerzo inversor en intangibles por sectores Sectores con un esfuerzo inversor superior a la media:

INDUSTRIAS: coquerías, química, material de transporte…

SERVICIOS: actividades creativas (audiovisual, edición, diseño…), profesionales y financieras…

TIC y telecomunicaciones

Sectores con un esfuerzo inversor inferior a la media: AGRICULTURA, HOSTELERÍA Y CONSTRUCCIÓN

Esfuerzo inversor en activos intangibles por sectores de actividad. Sector privado. España. 2011. (Porcentajes: Inversión intangible/VAB ampliado de cada sector)


0

5

10

15

20

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Indu

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Activ

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Activ

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Equi

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esca

[ 25 ]

INDEX




4. Final Remarks

[ 26 ]

Intangibles and Cultural and Creative (CC) Industries

Lets run a parallel analysis between:• CC Intangible Capital and CC Industries, and• ICT capital and ICT producing industries

ICT capital is the result of the accumulation of past investmentexpenditures on ICT assets. Thus, ICT capital must be considered as any other form of (tangible) capital.ICT assets: hardware, software and communication

ICT industries are the ones producing ICT goods and services. • Computer, electrical and optical equipment• Telecommunications

[ 27 ]

GFCF: ICT / NON-ICT ASSETS AND ICT PRODUCING INDUSTRIES

ICT NON-ICT TOTAL Software Harware Communication Constructions Transport Others

1 Agriculture, forestry and fishing2 Mining and quarrying3 Food products, beverages and tobacco4 Textiles, wearing apparel, leather and related products5 Wood and paper products; printing and reproduction of recorded media6 Coke and refined petroleum products7 Chemicals and chemical products8 Rubber and plastics products, and other non-metallic mineral products9 Basic metals and fabricated metal products

10 Computer, electrical and optical equipment11 Machinery and equipment n.e.c.12 Transport equipment13 Other manufacturing14 Electricity, gas and water supply15 Construction16 Wholesale and retail trade; repair of motor vehicles and motorcycles17 Transportation18 Accommodation and food service activities19 Publishing, audiovisual and broadcasting activities20 Telecommunications21 IT and other information services22 Financial and insurance activities

23 Professional, scientific, technical, administrative and support service activities

24 Other service activities

Industries

[ 28 ]

Intangibles and CC IndustriesLets take a closer look at the classification of CC intangible assets and industrieshaving in mind the ICT case.

We want to look at CC activities with a twofold perspective: i) they are carried out in particular CC industries and ii) they give way to specific CC intangible assets.

It is just a tentative approach since -contrary to the ICT case- as far as we know there is not a broadly accepted definition of CC industries, nor of the related CC assets.

From the industry perspective there are at least 4 alternative proposals:• ESSnet- Culture• European Cluster- Observatory• UK DCMS• UNESCO

We will take them as references for our proposal. However, our best choice implies a four digit level of industry disaggregation which is not available.

[ 29 ]

Classification of Intangible assetsIntangible capital asset typesComputerized information

1. Software

2. Databases

Innovative property

3. Mineral exploration

4. R&D (scientific)

5. Entertainment and artistic originals

6. New products/systems in financial services

7. Design and other new products/systems

Economic competencies

8. Brand equity

a. Advertising

b. Market research


a. Employer-provided training


Narrow definition of CC assets: items highlighted in blue. Wide definition of CC assets: narrow definition plus additional items highlighted in yellow.

[ 30 ]

Telefónica Foundation. Sectoral dissagregation Industrial classification and correspondence with CNAE 2009/NACE Rev. 2.

CNAE 2009/NACE Rev. 2

1 Agriculture, forestry and fishing 01-032 Mining and quarrying 5-93 Food products, beverages and tobacco 10-124 Textiles, wearing apparel, leather and related products 13-155 Wood and paper products; printing and reproduction of recorded media 16-186 Coke and refined petroleum products 197 Chemicals and chemical products 20-218 Rubber and plastics products, and other non-metallic mineral products 22-239 Basic metals and fabricated metal products 24-25

10 Computer, electrical and optical equipment 26-2711 Machinery and equipment n.e.c. 2812 Transport equipment 29-3013 Other manufacturing 31-3314 Electricity, gas and water supply 35-3915 Construction 41-4316 Wholesale and retail trade; repair of motor vehicles and motorcycles 45-4717 Transportation 49-5318 Accommodation and food service activities 55-5619 Publishing, audiovisual and broadcasting activities 58-6020 Telecommunications 6121 IT and other information services 62-6322 Financial and insurance activities 64-6623 Professional, scientific, technical, administrative and support service activities 69-8224 Other service activities 90-96

Industries

[ 31 ]

Classification of CC industries at two digit levelIndustries highlighted in yellow color include at least one CC industry at four digit level. For instance:

10. Computer, electrical and optical equipment includes (according only to the European Cluster Observatory):

2680. Manufacture of magnetic and optical media19. Publishing, audiovisual and broadcasting activities includes (according to at least three of the four classifications: ESSnet-Culture, European Cluster Observatory, UK DCMS, UNESCO) the following subindustries:

5811. Book Publishing5813. Publishing of newspapers5814. Publishing of journals and periodicals5819. Other publishers5821. Publishing of computer games5829. Other software publishers5911. Motion pictures, video and tv programme production activities5912. Motion pictures, video and tv programme post-production activities5913. Motion pictures, video and tv programme distribution activities5914. Motion pictures projection activities5920. Sound recording and music publishing activities6010. Radio Broadcasting6020. Television programming and broadcasting activities

[ 32 ]

GFCF: INTANGIBLE CC /NON-CC ASSETS AND CC PRODUCING SECTORS

CC NON-CC

TOTAL Computerized Information

Entertainment & artistics originals

Design Advertising Market Research

R&D Organizational Structure

Others

1 Agriculture, forestry and fishing2 Mining and quarrying3 Food products, beverages and tobacco4 Textiles, wearing apparel, leather and related products

5 Wood and paper products; printing and reproduction of recorded media

6 Coke and refined petroleum products7 Chemicals and chemical products

8 Rubber and plastics products, and other non-metallic mineral products

9 Basic metals and fabricated metal products10 Computer, electrical and optical equipment11 Machinery and equipment n.e.c.12 Transport equipment13 Other manufacturing14 Electricity, gas and water supply15 Construction16 Wholesale and retail trade; repair of motor vehicles and motorcycles17 Transportation18 Accommodation and food service activities19 Publishing, audiovisual and broadcasting activities20 Telecommunications21 IT and other information services22 Financial and insurance activities

23 Professional, scientific, technical, administrative and support service activities

24 Other service activities

Industries

[ 33 ]

Two 2 digit sectors (Professional Services, and Trade & Repair) comprising some of the CC industries concentrate the highest weight of Spanish intangible investmentSectoral dissagregation of intangible investment. Private sector, 1995 & 2011Percentage

Source: Author’s calculations.

0 2 4 6 8 10 12 14 16 18 20 22

Agriculture, forestry and fishing

Mining and quarrying

Electricity, gas and water supply

Food products, beverages and tobacco

Textiles, wearing apparel, leather and related products

Wood and paper products; printing and reproduction of recorded media

Coke and refined petroleum products

Chemicals and chemical products

Rubber and plastics products, and other non-metallic mineral products

Basic metals and fabricated metal products

Computer, electrical and optical equipment

Machinery and equipment n.e.c.

Transport equipment

Other manufacturing

Construction

Wholesale and retail trade; repair of motor vehicles and motorcycles

Transportation

Accommodation and food service activities

Publishing, audiovisual and broadcasting activities

Telecommunications

IT and other information services

Financial and insurance activities

Professional, scientific, technical, administrative and support service activities

Other service activities

1995 2011

[ 34 ]

Participation of intangible investment in non-residential total investment of each industry. Private sector, 1995 & 2011Percentage. Total = 100

S A th ’ l l ti

Publishing, audiovisual and broadcasting, Professional Services and IT and other information services have the highest weight of intangible on total non-residential investment (around 60%)

0 20 40 60 80 100 120

AGRICULTURE, FORESTRY AND FISHINGENERGY

Mining and quarryingElectricity, gas and water supply

MANUFACTURINGFood products, beverages and tobacco

Textiles, wearing apparel, leather and related productsWood and paper products; printing and reproduction of recorded media

Coke and refined petroleum productsChemicals and chemical products

Rubber and plastics products, and other non-metallic mineral productsBasic metals and fabricated metal productsComputer, electrical and optical equipment

Machinery and equipment n.e.c.Transport equipmentOther manufacturing

CONSTRUCTIONSERVICES

Wholesale and retail trade; repair of motor vehicles and motorcyclesTransportation

Accommodation and food service activitiesPublishing, audiovisual and broadcasting activities

TelecommunicationsIT and other information servicesFinancial and insurance activities

Professional, scientific, technical, administrative and support service…Other service activities

TOTAL PRIVATE SECTOR

1995 2011

[ 35 ]

Share of creative and cultural investment in total non-residential investment, selected CC industries. Spain. Private sector, 2011Percentage

Source: Author’s calculations.

The distribution of CC investment among CC industries is very uneven both in total and in composition

0

10

20

30

40

50

60

70

Wood andpaper products;

printing andreproduction ofrecorded media

Othermanufacturing

Wholesale andretail trade;

repair of motorvehicles andmotorcycles

Publishing,audiovisual and

broadcastingactivities

IT and otherinformation

services

Professional,scientific,technical,

administrativeand support

service activities

Other serviceactivities

Computerized information Entertainment and artistic originals and mineral explorationDesign and other new products/systems AdvertisementMarket research

[ 36 ]

Final Remarks• Nowadays there is a strong movement for widening the sources of growth

perspective.• Intangibles assets are taking the lead. R&D has always been identified as an

important source of growth, but more relevant aspects –such as improvements in the fuctioning of firms- are being included.

• One of the advantages of the CHS approach is that it stays within the NA bounderies, so intangibles can fit smoothly into the KLEMS framework.

• However, the characteristics of the new intangible assets facilitate movingaway from the neoclassical mainstream model into a more Shumpeterianperspective.

• There are already estimates of intangible capital for the EU countries, and theUS, thanks to the INTAN-Invest Iniciative.

• Next step is to broaden the scope including sectoral disaggregation. The workdone in Spain funded by Fundación Telefonica goes in this direction. Itconsiders 24 sectors (the same sectoral disaggregation as EU KLEMS).

• The SPINTAN project, funded by the 7th Framework Program startingDecember 2013 will contribute to increase our understanding of the role played by intangibles by expanding the actual framework to Public Sector Intangibles.

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Final RemarksConcerning Cultural and Creative Activities• We could think in CC as industries only. Alternatively, we could think

as, both, industries producing CC goods and services and as assets. • In the second case, the investment made by all economic sectors in

CC assets (Entertainment & Artistic orginals, Design and Advertising) could be capitalized as intangible capital and, thus, receive the sametreatment than other forms of (tangible) capital.

• In order to implement this approach it is needed:1. A clear definition of CC industries2. Most probably: a 4-digit sector level of disaggregation3. The expenditure made in each asset with this level of disaggregation4. A capitalization factor (how much of the expenditure made in each of the

three assets can be considered investment instead of intermediateconsumption?)

5. A deflator for each asset, as well as6. An average service life for each of them7. HARD WORK & GOOD LUCK

[ 38 ]

Intangibles and Cultural and Creative Industries

Matilde Mas & Javier QuesadaUniversidad de Valencia & Ivie

Seminario InternacionalEconomía Regional de las Actividades Creativas y los

Servicios Innovadores

Universidad de Alcalá, 25 y 26 de junio, 2015

intangibles and cultural and creative industries

Economy & Finance