Intangibles have increased in importance during the globalization process. The estimates ob-tained on the national level indicate that the share of intangible investment from GDP is around 7% for Finland or as found in Jalava, Aulin-Ahmavaara and Alanen (2007), 15%
from private sector value added. In our estimates, the own-account intangibles share of value added is 9% according to the expenditure-based approach but is found to be twice that in a performance-based evaluation of organizational capital. The performance-based approach receives considerable support from the market valuation model. Therefore, the intangible investment level is likely to be higher than the expenditure-based national estimates imply.
The performance-based evaluation of management and marketing shows that R&D capital and organizational capital stocks are nearly equal, at around 26-28% of value added. Intangi-ble capital has accounted for around 60% of value added in the economy. However, the in-crease in the intangible capital has not compensated for the dein-crease in other machinery and equipment (net plant, property and equipment), which have decreased in 1998-2007 from 85% to 60% of value added.
Intangible capital is an important missing factor in q-theory. Intangible capital stock explains the unexplained variation in the market value of firms listed on the Helsinki stock market during 1998–2007. Intangibles give valuable information regarding future performance, not only for high-market value firms. Bloom, Sadun, and Van Reenen (2007) emphasize the im-portance of organizational capital to productivity growth in services, but intangible capital is equally important in manufacturing. A 10% increase in intangibles, whether as the sum of organizational and ICT capital or of RND capital, increases the firm’s market value about 6% beyond that explained by economic forecast.
Taking into account intangible capital abroad or outside Europe has also had a significant effect in the evolution of market value, national measures of intangibles cannot capture the globalization effects. Future research should further develop performance-based
methodolo-gies and market valuation models that are better adapted to the firm-level evaluation of in-tangibles under the pressures of globalization.
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Appendix A. Occupational classification of non-production workers Occupation of non-production worker Organizational
worker R&D Marketing purchases non-prod superior Management
Administration non-prod Administration
Administration non-prod superior Administration Finance admin non-prod
Finance admin non-prod superior Management Personnel management non-prod Administration
Cleaner, garbage collectors, messengers
Services
Personnel project manag services Administration Personnel project manag services superior Management Administration services
Administration services superior Management
non-prod=non-production, admin=administration.
Appendix B. Summary of Variables and Correlations
Table B.1 Summary of variables
Variable Mean Std Median Obs
Value added factor prices 16489 78438 3460 20115
Operating revenue / Turnover 64175 583169 9710 20115
Sales Growth 0.038 0.35 0.028 17765
Employment 214 820 52 20115
Employees in organizational work 18 108 2 20115
Organizational worker share 8.5 % 0.14 3.3 % 20114
Organizational compensation 1198 7751 135 20115
Organizational compensation per value added 6.0 % 0.0027 6.0 % 20115
Management compensation 569 5398 56 20115
Management personnel 9.2 70 1 20115
Marketing, purchases compensation 361 2256 0 20115
Marketing personnel 8.7 53 0 20115
ICT compensation 937 14227 0 20115
ICT personnel 9573 100499 922 10675
R&D compensation 263 2545 0 20115
R&D capital 5.7 54 0 20115
Net plant, property, equipment 17061 125785 1083 20115
Material 5760 30070 726 20115
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