Are Intangibles Running out of Steam?

Using the EUKLEMS-INTANProd database (2023 release) for nine EU countries, the UK, and the U.S., this article asks whether intangible capital has lost productivity momentum. Intangible investment shares of nominal GDP continue to rise, but real intangible capital stock growth has moderately slowed. The contribution of intangible capital deepening to labour productivity growth remains positive but insufficient to offset the large decline in tangible capital deepening. Labour productivity growth has slowed relatively more in the most intangible-intensive industries (especially the UK and U.S.). Econometric analysis finds little evidence of strong TFP spillovers from intangible deepening, and mixed evidence on complementarities. Policy should focus on broad-based investment in both tangible and intangible assets.