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Intangibles and Cultural and Creative Industries

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Intangibles and Cultural and Creative Industries

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Intangibles and Cultural and Creative Industries

  1. 1. [ 1 ] Intangibles and Cultural and Creative Industries Matilde Mas & Javier Quesada Universidad de Valencia & Ivie Seminario Internacional Economía Regional de las Actividades Creativas y los Servicios Innovadores Universidad de Alcalá, 25 y 26 de junio, 2015
  2. 2. [ 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. 3. [ 3 ] INDEX 1. Intangible Assets. An Overview 2. Two projects related to intangibles: • SPINTAN • Telefónica Foundation 3. Intangibles and Cultural and Creative Industries. A tentative approach. 4. Final Remarks
  4. 4. [ 4 ] Motivation Robert Solow (1987) statement about computers could be rephrased as: “While knowledge 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 knowledge economy 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. 5. [ 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. 6. [ 6 ] Classification of Intangible assets Intangible capital asset types Computerized 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. 7. [ 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. 8. [ 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. 9. [ 9 ] 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
  10. 10. [ 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. 11. [ 11 ] SPINTAN project  Smart Public Intangibles: SPINTAN Participant organisation name Country Ivie Instituto Valenciano de Investigaciones Económicas Spain NIESR National Institute of Economic and Social Research UK LUISS Lab of European Economics Italy Istat Istituto Nazionale di Statistica Italy IC Imperial College Business School UK TCBE The Conference Board Europe Belgium OECD Organisation for Economic Cooperation and Development France ZEW Centre for European Economic Research Germany DIW Deutsches Institut für Wirschaftsforschung Germany wiiw Vienna Institute for International Economic Studies Austria FORES Forum for Reforms, Entrepreneurship and Sustainability Sweden KOPINT Kopint-Tárki Konjunktúrakutató Intézet Zrt. Hungary
  12. 12. [ 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. 13. [ 13 ] 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
  14. 14. [ 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. 15. [ 15 ] Telefónica Foundation. Sectoral dissagregation Industrial classification and correspondence with CNAE 2009/NACE Rev. 2. Ivie’s estimation Industries CNAE 2009 / NACE Rev. 2 1 Agriculture, forestry and fishing 01-03 2 Mining and quarrying 5-9 3 Food products, beverages and tobacco 10-12 4 Textiles, wearing apparel, leather and related products 13-15 5 Wood and paper products; printing and reproduction of recorded media 16-18 6 Coke and refined petroleum products 19 7 Chemicals and chemical products 20-21 8 Rubber and plastics products, and other non-metallic mineral products 22-23 9 Basic metals and fabricated metal products 24-25 10 Computer, electrical and optical equipment 26-27 11 Machinery and equipment n.e.c. 28 12 Transport equipment 29-30 13 Other manufacturing 31-33 14 Electricity, gas and water supply 35-39 15 Construction 41-43 16 Wholesale and retail trade; repair of motor vehicles and motorcycles 45-47 17 Transportation 49-53 18 Accommodation and food service activities 55-56 19 Publishing, audiovisual and broadcasting activities 58-60 20 Telecommunications 61 21 IT and other information services 62-63 22 Financial and insurance activities 64-66 23 Professional, scientific, technical, administrative and support service activities 69-82 24 Other service activities 90-96
  16. 16. [ 16 ] Sources Intangible capital asset types Sources Computerized information 1. Software National Accounts (INE), EU KLEMS and BBVA Foundation-Ivie 2. Databases Innovative property 3. 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 competencies 8. Brand equity a. Advertising National 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) 9. Firm-specific resources a. Employer-provided training Continuing Vocational Training Survey (CVTS) (Eurostat), National Accounts (INE), Labour Costs Survey (INE), Annual Labour Costs Survey (INE), Adult Education Survey (INE) b. Organizational structure 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. 17. [ 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 los períodos de crisis. La inversión en intangibles y la hipótesis del estancamiento 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. 18. [ 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) Fuente: Fundación Telefónica, Fundación BBVA-Ivie y elaboración propia. 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 Inversión intangible Inversión tangible (no residencial) 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 Inversión intangible Inversión tangible (no residencial) Fuente: INE, EU KLEMS, Fundación Telefónica, Fundación BBVA-Ivie y elaboración propia.
  19. 19. [ 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 España vs. 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 41,9 45,8 67,0 48,7 42,4 27,9 55,6 0 10 20 30 40 50 60 70 España UE-15 Países nórdicos¹ EE. UU. Francia Alemania Italia Reino Unido 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 Países nórdicos¹ EE. UU. Francia Alemania Italia Reino Unido Inversión tangible Inversión intangible
  20. 20. [ 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 digitalizada Propiedad innovadora Competencias económicas 1,5 1,8 3,1 2,3 2,6 1,1 1,0 2,6 2,2 3,6 5,2 5,7 4,6 4,3 2,4 3,4 3,3 5,1 4,9 7,3 6,3 4,5 3,5 6,9 0 2 4 6 8 10 12 14 16 España UE-15 Países nórdicos² EE. UU. Francia Alemania Italia Reino Unido Información digitalizada Propiedad de la innovación Competencias económicas
  21. 21. [ 21 ] Inversión en propiedad innovadora  La actividad diseñadora (50%), junto a la I+D (35,6%), son los componentes más relevantes de la inversión en propiedad innovadora.  En comparación con otras regiones, el peso de la I+D en la propiedad innovadora 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) Fuente: Fundación Telefónica y elaboración propia. 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+D Prospec. minera y originales de obras recreat., lit. o artísticas Nuevos productos/sistemas en los servicios financieros Diseño y otros nuevos productos 35,6 50,4 62,8 52,4 45,9 62,7 40,2 39,1 11,2 7,9 3,8 24,6 7,4 7,0 6,8 12,6 2,7 4,5 2,4 5,3 4,7 2,8 5,0 6,8 50,5 37,1 31,1 17,6 42,0 27,5 48,0 41,5 0 20 40 60 80 100 España UE-15 Países nórdicos² EE. UU. Francia Alemania Italia Reino Unido Diseño y otros nuevos productos Nuevos productos/sistemas en los servicios financieros Prospecc. minera y originales de obras recreativas, literarias o artísticas I+D
  22. 22. [ 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 16,9 22,9 11,5 16,6 15,2 10,6 7,6 8,5 5,1 4,4 7,4 5,4 16,1 5,7 22,8 25,2 28,6 24,5 26,3 32,5 25,1 22,8 36,8 51,0 49,4 48,1 54,8 45,5 43,6 60,9 0 20 40 60 80 100 España UE-15 Países nórdicos² EE. UU. Francia Alemania Italia Reino Unido Publicidad Estudios de mercado Capital humano de empresa Estructura organizativa
  23. 23. [ 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 Construcción Comercio Otros servicios Fuente: Fundación Telefónica y elaboración propia. 27,7 39,2 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 52,3 45,2 57,0 37,1 43,1 67,5 0 20 40 60 80 100 España Países nórdicos² 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. 24. [ 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) Fuente: Fundación Telefónica, Fundación BBVA-Ivie y elaboración propia. 0 5 10 15 20 Coquerías Edición,audiovisualesyradio Fab.Materialdetransporte Telecomunicaciones Industriaquímica Actividadesprofesionales Activ.financierasyseguros Otrosservicios Equipoeléctrico,electrónicoy óptico Tecnologíasdelainformación Energíaeléctrica,gasyagua Alimentación,bebidasytabaco Fabricacióndemaquinariay equipo Mediadelsectorprivado Comercioyreparación Textil,confección,cueroycalzado Industriasextractivas Cauchoyplásticos Transporteyalmacenamiento Madera,corcho,papelyartesgráf. Industriasmanufacturerasdiversas Metalurgiayproductosmetálicos Construcción Hostelería Agricultura,ganaderíaypesca
  25. 25. [ 25 ] 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
  26. 26. [ 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 investment expenditures 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. 27. [ 27 ] GFCF: ICT / NON-ICT ASSETS AND ICT PRODUCING INDUSTRIES ICT NON-ICT TOTAL Software Harware Communication Constructions Transport Others 1 Agriculture, forestry and fishing 2 Mining and quarrying 3 Food products, beverages and tobacco 4 Textiles, wearing apparel, leather and related products 5 Wood and paper products; printing and reproduction of recorded media 6 Coke and refined petroleum products 7 Chemicals and chemical products 8 Rubber and plastics products, and other non-metallic mineral products 9 Basic metals and fabricated metal products 10 Computer, electrical and optical equipment 11 Machinery and equipment n.e.c. 12 Transport equipment 13 Other manufacturing 14 Electricity, gas and water supply 15 Construction 16 Wholesale and retail trade; repair of motor vehicles and motorcycles 17 Transportation 18 Accommodation and food service activities 19 Publishing, audiovisual and broadcasting activities 20 Telecommunications 21 IT and other information services 22 Financial and insurance activities 23 Professional, scientific, technical, administrative and support service activities 24 Other service activities Industries
  28. 28. [ 28 ] Intangibles and CC Industries Lets take a closer look at the classification of CC intangible assets and industries having 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. 29. [ 29 ] Classification of Intangible assets Intangible capital asset types Computerized 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 Narrow definition of CC assets: items highlighted in blue. Wide definition of CC assets: narrow definition plus additional items highlighted in yellow.
  30. 30. [ 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 01-03 2 Mining and quarrying 5-9 3 Food products, beverages and tobacco 10-12 4 Textiles, wearing apparel, leather and related products 13-15 5 Wood and paper products; printing and reproduction of recorded media 16-18 6 Coke and refined petroleum products 19 7 Chemicals and chemical products 20-21 8 Rubber and plastics products, and other non-metallic mineral products 22-23 9 Basic metals and fabricated metal products 24-25 10 Computer, electrical and optical equipment 26-27 11 Machinery and equipment n.e.c. 28 12 Transport equipment 29-30 13 Other manufacturing 31-33 14 Electricity, gas and water supply 35-39 15 Construction 41-43 16 Wholesale and retail trade; repair of motor vehicles and motorcycles 45-47 17 Transportation 49-53 18 Accommodation and food service activities 55-56 19 Publishing, audiovisual and broadcasting activities 58-60 20 Telecommunications 61 21 IT and other information services 62-63 22 Financial and insurance activities 64-66 23 Professional, scientific, technical, administrative and support service activities 69-82 24 Other service activities 90-96 Industries
  31. 31. [ 31 ] Classification of CC industries at two digit level Industries 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 media 19. 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 Publishing 5813. Publishing of newspapers 5814. Publishing of journals and periodicals 5819. Other publishers 5821. Publishing of computer games 5829. Other software publishers 5911. Motion pictures, video and tv programme production activities 5912. Motion pictures, video and tv programme post-production activities 5913. Motion pictures, video and tv programme distribution activities 5914. Motion pictures projection activities 5920. Sound recording and music publishing activities 6010. Radio Broadcasting 6020. Television programming and broadcasting activities
  32. 32. [ 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 fishing 2 Mining and quarrying 3 Food products, beverages and tobacco 4 Textiles, wearing apparel, leather and related products 5 Wood and paper products; printing and reproduction of recorded media 6 Coke and refined petroleum products 7 Chemicals and chemical products 8 Rubber and plastics products, and other non-metallic mineral products 9 Basic metals and fabricated metal products 10 Computer, electrical and optical equipment 11 Machinery and equipment n.e.c. 12 Transport equipment 13 Other manufacturing 14 Electricity, gas and water supply 15 Construction 16 Wholesale and retail trade; repair of motor vehicles and motorcycles 17 Transportation 18 Accommodation and food service activities 19 Publishing, audiovisual and broadcasting activities 20 Telecommunications 21 IT and other information services 22 Financial and insurance activities 23 Professional, scientific, technical, administrative and support service activities 24 Other service activities Industries
  33. 33. [ 33 ] Two 2 digit sectors (Professional Services, and Trade & Repair) comprising some of the CC industries concentrate the highest weight of Spanish intangible investment Sectoral dissagregation of intangible investment. Private sector, 1995 & 2011 Percentage 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. 34. [ 34 ] Participation of intangible investment in non-residential total investment of each industry. Private sector, 1995 & 2011 Percentage. 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 FISHING ENERGY Mining and quarrying Electricity, gas and water supply MANUFACTURING 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 SERVICES 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… Other service activities TOTAL PRIVATE SECTOR 1995 2011
  35. 35. [ 35 ] Share of creative and cultural investment in total non-residential investment, selected CC industries. Spain. Private sector, 2011 Percentage 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 and paper products; printing and reproduction of recorded media Other manufacturing Wholesale and retail trade; repair of motor vehicles and motorcycles Publishing, audiovisual and broadcasting activities IT and other information services Professional, scientific, technical, administrative and support service activities Other service activities Computerized information Entertainment and artistic originals and mineral exploration Design and other new products/systems Advertisement Market research
  36. 36. [ 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 moving away from the neoclassical mainstream model into a more Shumpeterian perspective. • There are already estimates of intangible capital for the EU countries, and the US, thanks to the INTAN-Invest Iniciative. • Next step is to broaden the scope including sectoral disaggregation. The work done in Spain funded by Fundación Telefonica goes in this direction. It considers 24 sectors (the same sectoral disaggregation as EU KLEMS). • The SPINTAN project, funded by the 7th Framework Program starting December 2013 will contribute to increase our understanding of the role played by intangibles by expanding the actual framework to Public Sector Intangibles.
  37. 37. [ 37 ] Final Remarks Concerning 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 same treatment than other forms of (tangible) capital. • In order to implement this approach it is needed: 1. A clear definition of CC industries 2. Most probably: a 4-digit sector level of disaggregation 3. The expenditure made in each asset with this level of disaggregation 4. A capitalization factor (how much of the expenditure made in each of the three assets can be considered investment instead of intermediate consumption?) 5. A deflator for each asset, as well as 6. An average service life for each of them 7. HARD WORK & GOOD LUCK
  38. 38. [ 38 ] Intangibles and Cultural and Creative Industries Matilde Mas & Javier Quesada Universidad de Valencia & Ivie Seminario Internacional Economía Regional de las Actividades Creativas y los Servicios Innovadores Universidad de Alcalá, 25 y 26 de junio, 2015

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