Intangibles in Economies and International Trade

Abstract

Knowledge and intangibles such as R&D, know-how, intellectual property, brands – and more broadly – intellectual capital - are nowadays regarded as the key drivers of competitiveness and wealth creation. Despite their importance, intangibles are not yet properly measured. There are also some conceptual ambiguities concerning their definition, forms, and boundaries, therefore it is the first aim of the paper to make a selection of the acceptable definition that is the basis of further analysis. The share of intangibles in economies has risen remarkably, changing the weight of factors influencing economic development and transforming the structure of economies. Natural resources and man-made assets are not anymore crucial for the competitive position of economically advanced countries. It is knowledge and intangible assets that are the most important factors for innovation today. According to OECD, faster growth in investment in intangible assets than in tangibles is observed. The paper shows the changes in this regard in EU-15 countries and the United States. A special attention is paid to the investments in intangibles during the crisis – whether they were growing in that time or – because of greater aversion to risk and higher importance of tangible collateral for investors – declining. Together with the growing role of intangibles in modern economies their role in international trade rises as well, both in absolute and relative terms. The analysis of the role of intangibles in domestic economies was carried out on the basis of methodology developed by (Corrado, et al., 2005).Studies of international trade in intangibles is based on the data included in technological balance of payments and more specifically - balance of trade in royalties and licence fees