The productivity gap between Europe and the US has continued to widen in recent decades (Adilbish et al. 2025). Closing this gap will depend heavily on investment in intangible capital and new technologies (Westlake and Haskel 2018), particularly with the rise of artificial intelligence (AI), which is expected to have a strong impact in driving future productivity growth (Filippucci et al. 2024). In this context, France and Germany represent a peculiar case: despite having otherwise similar economic profiles, they show contrasting trends in intangible capital investment over recent decades. In a recent paper (Nonnis et al. 2025), we examine these differences and highlight potential issues in the measurement of intangible capital in the two countries. Using official data from the 2025 release of the EUKLEMS/INTANProd database (Bontadini et al. 2023),
we find striking differences in software and organisational capital investment that appear inconsistent with available firm-level survey data. Correcting these measurement issues, particularly in software, would likely lead to an upward revision of Germany’s GDP and its growth trajectory.
Intangible capital in France and Germany: EUKLEMS evidence
Table 1 reports average intangible capital investment in major European economies, with Sweden included as the top performer for comparison. France has been among the top investors in intangible capital (16%), whereas Germany invested much less (10.7%). This difference stems from both intangibles included in national accounts (5.3% in France versus 4.0% in Germany) and those not included in the national accounts (10.7% in France versus 6.7% in Germany).
Table 1 Intangible capital investment as a percentage of gross value added, 1995-2021
Note: Nat. Acc. = National Accounts. Investment and gross value added are expressed in real terms using chain-linked volumes (2020). Source: EUKLEMS/INTANProd data (Bontadini et al. 2023). Reference: Table 1 is based on a modified version of Table 1 in Nonnis et al. (2025).
To better understand these gaps, Figure 1 shows the breakdown of intangible capital by type, revealing that the most significant disparities come from software, where France invested 3.2 times as much (2.4% versus 0.7%), and from organisational capital, where France invested 2.6 times as much as Germany (5.3% versus 2%). Surprisingly, these differences did not translate into divergent labour productivity growth (LPG) trends, which remained broadly similar over the period, as we show in our paper (Nonnis et al. 2025).
Figure 1 Intangible capital investment as a percentage of gross value added, 1995-2021
Note: The bars in the figure represent the percentage of investment in each intangible asset relative to gross value-added, all measured in real terms using chain-linked volumes (2020). Ratios denoted as ‘FR/DE ratio’ indicate the ratio between the French and German values for each intangible capital investment type. OIPP = other intellectual property products. Org. Cap. = Organisational Capital. Nat. Acc. = National Accounts. Source: EUKLEMS/INTANProd data (Bontadini et al. 2023). Reference: Figure 1 is based on Figure 3 in Nonnis et al. (2025).
Given the close similarity of the two economies, both of which strongly influence EU and euro area integration, it is unlikely that the discrepancies in investment levels can be explained solely by differences in efficiency (Nonnis et al. 2024). A more plausible explanation may lie in measurement issues concerning investment in software and organisational capital.
Evidence from international firm-level surveys
To further corroborate the somewhat puzzling figures presented above, it is helpful to look at several international firm-level surveys conducted in recent years. For example, Figure 2 reports results from the H2020 project GlobalInto survey, which highlights that German firms invested significantly more than French firms in software in 2019 (1.9% versus 0.5% of total turnover), while the two invested similar amounts in organisational capital (1.2% in Germany versus 1.4% in France). Other sources, such as the 2023 European Investment Bank (EIB) Investment Survey, which examines the percentage of investment relative to total investment, confirm these contradictory patterns (Nonnis et al. 2025).
Figure 2 Business intangible capital investment as a percentage of firm turnover, 2019
Note: Ratios denoted as ‘FR/DE ratio’ above the bars indicate the ratio between the French and German values for each intangible capital investment type. Org. Cap. = Organisational Capital. Nat. Acc. = National Accounts. Source: GlobalInto survey (Bloch et al. 2024). Reference: Figure 2 is based on Figure 8 in Nonnis et al. (2025).
Measurement and accounting practices in France and Germany
France’s INSEE and Germany’s Destatis employ different approaches to measure intangible investment, resulting in staggeringly different outcomes. The INSEE 2024 revision corrected several software-related issues, yet significant differences remain. France reported €32.3 billion in (own-account) software-related investment in 2019, compared with just €11.5 billion in Germany in 2016. This gap likely reflects the use of different data sources.
INSEE’s revision addressed several types of issues related to purchased software, but measurement challenges persist. Germany reports difficulties in measuring the investment in purchased software, raising questions about the robustness of the official figures.
For organisational capital, the estimates largely depend on the reported share of managers in the workforce, which is much higher in France than in Germany (21.7% versus 5%). These gaps are unlikely to reflect actual differences in business and organisational models but rather point to a lack of harmonisation in the International Standard Classification of Occupations (ISCO) between the two countries.
Implications for GDP and official statistics
The issues highlighted have direct policy relevance. First, they reflect the broader challenge of measuring intangible capital, harmonising data across countries, and assessing its impact on productivity. Intangible investment shares many characteristics with other types of capital and makes an essential contribution to economic performance. Including assets such as organisational capital in national accounts is therefore a natural step, provided that measurement is harmonised across countries.
More immediately, correcting mismeasured software investment could imply a revision of current and past GDP figures. In Germany, an upward adjustment is particularly likely, given the currently low reported figures, while France has already updated its measures.
Conclusion
In conclusion, our column highlights likely measurement issues for intangible capital in France and Germany. Official macroeconomic data suggest that France invested considerably more in software (three times) and organisational capital (two and a half times) over recent decades. These figures conflict with firm-level survey evidence as well as the countries’ economic structures and labour productivity growth trends.
How should these measurement issues be resolved? Our findings underscore the need to harmonise the measurement of software and organisational capital, revisiting accounting practices at both the firm and national levels. Accurate and comparable data are essential not only for understanding the true impact of intangible investment on productivity growth, but also to ensure the correct measurement of aggregate economic statistics. GDP figures could be impacted by revisions to software investment measures, especially in Germany. Correcting Germany’s software investment would likely increase GDP. The magnitude of such an increase needs to be better documented.
References
Adilbish, O-E, D A Cerdeiro, R Duval, G H Hong, L Mazzone, L Rotunno, H Toprak and M Vaziri (2025), “Europe’s productivity weakness: Firm-level roots and remedies”, VoxEU.org, 24 February.
Bloch C, A Protogerou and N S Vonortas (2024), Intangible assets, productivity and economic growth: micro, meso and macro perspectives, Routledge, (Routledge studies in the economics of business and industry).
Bontadini, F, C Corrado, J Haskel, M Iommi and C Jona-Lasinio (2023), “EUKLEMS & INTANProd: Industry productivity accounts with intangibles. Sources of Growth and Productivity Trends: Methods and Main Measurement Challenges”, Luiss Lab of European Economics, Rome.
Filippucci, F, P Gal and M Schief (2024), “Miracle or myth: Assessing the macroeconomic productivity gains from artificial intelligence”, VoxEU.org, 8 December.
Nonnis, A, F Roth and A Bounfour (2024), “Is the EU ready for the next generation of investment? The case of France and Germany”, Hamburg Discussion Papers in International Economics No 16.
Nonnis, A, F Roth and A Bounfour (2025), “Intangible Capital in France and Germany: Is there a Measurement Issue?”, ASTA Wirtschafts- und Sozialstatistisches Archiv.
Westlake, S and J Haskel (2018), “Productivity and secular stagnation in the intangible economy”, VoxEU.org, 31 May.