Depreciation and Net Capital Services: how much do Intangibles contribute to Economic Growth?

We show how to decompose the contribution made by capital services to eco nomic growth into two components, depreciation services and net capital services. We apply this to examine the contributions to economic growth by depreciation and net capital services of both tangible and intangible investment. Looking at France, Germany, the UK and the US from 1997 to 2019, we find that while overall capital services contributed between 0.6 (Germany) and 1.4 (US) percentage points to growth in GVA, net of depreciation the contributions ranged from 0.1 (Germany) to 0.5 (US) percentage points. Looking only at intangibles we find gross contributions of 0.3 (Germany) to 0.7 (US) percentage points while net of depreciation the contributions of intangibles were 0.1 (Germany) to 0.2 (US) percentage points. We conclude that a focus on gross output overstates the importance of intangible capital in these economies.