Sum of knowledge

OECD Observer

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How much do our knowledge-based societies actually invest in knowledge? One way to find out, according to OECD Science, Technology and Industry Scoreboard published in May, is to work out the sum of three spending areas: R&D, higher education (public and private) and software. The figures are reworked where possible to avoid overlap between, say, education and R&D.

Nor does the available data include areas like spending on business innovation, design, training, organisation and the like. With these caveats in mind, the latest comparable data for the OECD comes from 2000, when average investment in knowledge came to 4.8% of GDP. Sweden spent the most on knowledge, with 7.2% of GDP, followed by the US (6.8%) and Finland (6.2%). Overall, the ratio is 2.8 percentage points higher in the US than in the EU. Investment in knowledge was lowest (below 2.5% of GDP) in southern and central Europe, and Mexico.

Most OECD countries have increased spending in their knowledge base, the Scoreboard reports. In the 1990s, Denmark, Ireland, Finland and Sweden increased it by more than 7.5% annually, far above their increase in gross fixed capital formation, though this item grew more rapidly than knowledge investment in Australia, Canada and the US. For most countries, increases in software expenditure were the major source of increased investment in knowledge.

©OECD Observer No 244, September 2004

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