Intangible investments have been found to support aggregate labour productivity growth directly as a production input, as well as via interactions with new technologies. However, focus on the “organisational capital” (OC) component of intangibles has been scarce, partly due to lack of data. This study looks at how the complementarity between a specific subset of intangibles, OC, and ICT affects aggregate labour productivity outcomes, focusing on the distinction between own-account and purchased organisational expenses in digitally intensive industries. We leverage the EUKLEMS & INTANProd harmonised and fully integrated productivity database including all intangible components, with broad international, industry and historical coverage (Bontadini et al., 2023; Corrado et al., 2022a) to address this gap. Based on a sample of 10 OECD countries and 39 manufacturing and service industries over the 1995-2019 period, we find robust evidence that the productivity benefits of organisational expenses originate mostly from in-house buildup of such intangibles. These are more than twice as productive as purchased organisational services in our estimates and these results are magnified in industries that are relatively more digitally intensive. Crucially, we find evidence of production complementarities between organisational expenses and ICT intensity. Synergies between OC and ICT are driven mostly by investment in own-account organisational capital and are stronger in digitally intensive industries. Our results suggest that a better internal organisation of production is a key channel through which intangible investments affect productivity and that there are relevant complementarities between intangibles, new technologies and digital adoption. These results emphasise how investment in organisational capital can amplify the benefits of new technologies and digital tools, ultimately driving productivity gains.
Authors Filippo Bontadini, Cecilia Jona-Lasinio, Giuseppe Nicoletti