Observatory > Knowledge intensive GDP

Knowledge intensive GDP

Knowledge economy is the term applied to describe an economy where, at the present stage of economic development, a considerable share of production is based on accumulated knowledge. Despite this term being frequently used, there is no metric that accurately measures how much economic value produced in developed countries stems from this process and where its weight is the most significant.

Until recently, the approaches used to measure the density of an economy’s knowledge have been based on classifying productive activities into categories according to technology intensity, on the basis of R&D expenditure or use of highly-skilled labour, and on the development of Knowledge Satellite Accounts within the framework of the National Accounts.

The assessment carried out in the ABACO Observatory proposes a new line of research, where the weight of knowledge in GDP is measured based on the market value of a set of knowledge-based production factors, and therefore incorporated into activities when they are used in the production process. To carry out this assessment, the analytical structure of modern growth accounting is used, allowing us to differentiate the value of various types of physical and human capital services. From this perspective, the production factors considered are labour and physical capital. Within these factors, knowledge content in all types of work exceeding the basic level of studies is recognized, as well as all the capital accumulated in machinery and equipment. Under this definition of knowledge intensive factors, workers with higher education and capital related to new information and communication technologies (ICT) are the most intensive in knowledge.

Data are available for a total of 18 countries, allowing interesting international comparisons, and also for a comprehensive disaggregation of activities (28 industries). The Series cover the period 1980-2007 and in the case of Spain cover until 2010.

See methodological notes in ABACO report