Understanding the causes of the slowdown in aggregate productivity growth is key to maintaining the competitiveness of advanced economies and ensuring long-term economic prosperity. This paper is the first to provide evidence that investment in Knowledge-Based Capital (KBC), despite having a positive effect on productivity at the micro level, is a driver of the weak productivity performance at the aggregate level, by accentuating divergence between a group of "frontier" firms and the rest of the economy. Using detailed firm-level administrative data for Germany, we find evidence that the effect of KBC on productivity is heterogeneous across firms within industries: this effect is 3 times larger for firms in the top quintile of the KBC distribution compared to firms in the bottom quintile of the KBC distribution. We document the existence of divergence in productivity growth between top KBC users and the rest of firms at the industry level, and find that industries where this gap is larger are also those industries where the heterogeneity in the effect of KBC is highest and where average productivity growth was lower. The evidence hence supports the view that the use of KBC plays a role in explaining weak productivity growth, by accentuating differences between firms.

This work proposes a task-based methodology for the measurement of employment and investment in organisational capital (OC) in 20 OECD countries. It builds on the methodology of Squicciarini and Le Mouel (2012) and uses information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). OC is defined as firm-specific organisational knowledge resulting from the performance of tasks affecting the long-term functioning of firms, such as developing objectives and strategies; organising, planning and supervising production; and managing human resources. Crosscountry heterogeneity in OC-related occupations emerges: while 20 occupational classes of the International Standard Classification of Occupations (ISCO 2008) are on average identified as being OC-related, country-specific values range between 14 (in Korea) and 24 occupations (in Poland). A core group of managerial occupations are consistently identified as OC occupations across countries, whereas differences arise in the selection of professionals and associate professionals in science and engineering, health, education, and business administration. Estimates suggest the share of OC occupations in total employment to amount to 16% on average, with country-specific values that vary between 9.5% (Denmark) and 26% (United Kingdom); and that total investment in OC, as a share of value-added, ranges from 1.4% in the Czech Republic to 3.7% in the United Kingdom, with an average 2.2% across all countries. Managers appear to account for less than half of total employment and investment in OC. Total investment in OC results higher in services than in manufacturing. In the services sector, on average half of investment in OC comes from small firms, while in manufacturing, 45% of investment in OC comes from large firms. Finally, the importance of OC investment in the public sector is investigated. With only few exceptions, investment in OC is higher in the public sector than in the private sector. These estimates of OC investment can be used to analyse its role with respect to skill use and mismatch, its impact on the routinisation of tasks and resulting polarisation of wage distribution, and its role in firms' integration and upgrading along global value chains (GVC).

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Acknowledgements: We are grateful to Mary O'Mahony, Sebastien Miroudot, the OECD-PIAAC team, the country delegates to the OECD Working Party on Industry Analysis (WPIA) and the participants of the EUfunded SPINTAN project for helpful comments and for providing feedback on earlier versions of the paper. The existing discussion paper is also available as an OECD Science, Technology and Industry Working Paper, number 2015/08, doi: 10.1787/5jrs3smfgcjb-en. The usual caveats apply. Terms of use: Documents in EconStor may 2 ABSTRACTThis work proposes a task-based methodology for the measurement of employment and investment in organisational capital (OC) in 20 OECD countries. It builds on the methodology of Squicciarini and Le Mouel (2012) and uses information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). OC is defined as firm-specific organisational knowledge resulting from the performance of tasks affecting the long-term functioning of firms, such as developing objectives and strategies; organising, planning and supervising production; and managing human resources. Occupations contributing to the generation of OC are identified using distribution-based criteria and clustering analysis. Crosscountry heterogeneity in OC-related occupations emerges: while 20 occupational classes of the International Standard Classification of Occupations (ISCO 2008) are on average identified as being OC-related, country-specific values range between 14 (in Korea) and 24 occupations (in Poland). A core group of managerial occupations are consistently identified as OC occupations across countries, whereas differences arise in the selection of professionals and associate professionals in science and engineering, health, education, and business administration. Inhouse investment in OC for the 2012 is measured à la Corrado, Hulten and Sichel (2009), as 20% of wages paid to OC-related occupations. Estimates at the aggregate level suggest the share of OC occupations in total employment to represent between 9.5% (Denmark) to 26% (United Kingdom), with an average of 16%. Total investment in OC, as a share of value-added, ranges from 1.4% in the Czech Republic to 3.7% in the United Kingdom, with an average 2.2% across all countries. Managers appear to account for less than half of total employment and investment in OC, and total investment in OC is higher in services than in manufacturing. Experimental estimates of investment in OC by firm class si...

Understanding the causes of the slowdown in aggregate productivity growth is key to maintaining the competitiveness of advanced economies and ensuring long‐term economic prosperity. This paper provides evidence that investment in intangible capital, despite having a positive effect on productivity at the micro level, is a driver of the weak productivity performance at the aggregate level as it amplifies the divergence between a group of “frontier” firms and the rest of the economy. Using firm‐level data, we find that the effect of intangible capital on productivity is heterogeneous across firms within industries. Documenting the existence of divergence in productivity growth between top intangible users and the rest of firms at the industry level, we find that industries where this gap is larger are also those industries where the heterogeneity in the effect of intangible capital is highest and where average productivity growth was lower. Thus, the evidence supports the view that the use of intangible capital plays a role in explaining weak aggregate productivity growth, by intensifying differences between firms.

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