Understanding the uneven growth of Intellectual Property Products investment in the U.S.

Given the attention to intangible capital in studying industry dynamics and aggregate investment trends in the last couple of decades, this paper provides a descriptive analysis of Intellectual Property Products (IPP) as measured in the National Accounts (NIPAs) by the Bureau of Economic Analysis (BEA), with attention directed to their three components: R\&D, Software, and Entertainment, literary and artistic originals (ELAO), as well as the relationship among investment in IPP, equipment, and structures within some key sectors in the economy.

In particular, we show that for the 7 sectors studied in this paper, there was and still is a lot of heterogeneity in the types of IPP capital that sectors use to produce and deliver goods and services.

We also illustrate that this heterogeneity seems to be the combination of different forces: First, the initial composition of the production function in 1980 among structures, equipment, and IPP components is quite persistent, and second, the different evolution of prices of these three types of IPP capital has played an important role in the pace of investment and transformation in these sectors.