EU competitiveness: the critical role of intangible assets in labour productivity growth

Analysing 14-EU member states and the UK from 1995–2019 and using growth regressions, we find that Research and Innovation (R&I) are crucial for labour productivity growth (LPG). We contribute to the literature by distinguishing between Information and Communication Technology (ICT) and non-ICT tangibles and focusing on four key intangibles: research and development (R&D), software, organisational capital, and training. We also differentiate between the goods- and services-sectors, as well as the periods before and after the 2007/8-crisis. We find that LPG in the goods-sector benefits the most from non-ICT tangibles, while in the services-sector, from intangibles other than R&D, including software, organisational capital, and training.