PRIN – DIGITAL INNOVATION: AN ASSESSMENT OF THE RELATIONSHIP BETWEEN DATA AND OTHER INTANGIBLE ASSETS AND PRODUCTIVITY (INNODATA)

INNODATA is a novel research project on the link between innovative intangibles and economic performance in the digital economy.

The root causes of the widespread decline in productivity growth rate are complex and related to several factors: deindustrialization, technological transformations, rising market concentration, the widening gap between the frontier and laggard firms, and diminishing returns to R&D. The global pandemic and the ensuing recession are expected to exacerbate productivity slowdown, and firms might try to cope by innovating, that is, investing in new technologies and products. The latest wave of digitalization has opened new avenues for firm innovation and requires novel investments beyond R&D. Artificial Intelligence, and other forms of automation mainly rely on data and other intangible assets. Investing in intangibles expands the firm productive capacity, yet evidence on whether this improves productivity is not unanimous.

Further, digital markets tend to be more concentrated, and a few global companies extract data value, raising usual concerns for social and consumer welfare, market efficiency, and the effectiveness of innovation policies. Against this backdrop, the project aims to unpack the links between data and other intangible investments and the poor productivity performance of firms and countries in the EU.