"We aim to understand the contributions of intangible investments to innovation, competitiveness, growth and productivity in Europe. Such a project is, we feel, vital to help EU policy formation and deepen our understanding of some of the most crucial questions facing EU economic policy. The reason is simple. Currently, (almost all) intangible investments are either not measured, or treated as an intermediate input into production so they are assumed to produce no durable assets for firms or economies. Does this matter? In practice, most knowledge investments involve intangible spending. And, the Lisbon agenda aims to make the EU “the most competitive and dynamic knowledge-driven economy by 2010 (our italics)”. Thus we are in the difficult position of having perhaps the major EU policy aspiration backed by almost no data or measures. This project will set out a method and collect the data required. Given the issue’s importance, we believe our work will make a considerable contribution. Some knowledge investment is counted as such in the key economic measures such as GDP (e.g. software). However, R&D and other knowledge investment (like investment in human capital via training, investment in reputation capital, investment in organisational capital etc) are all treated as day-to-day expenses, not investment. Thus, under current conventions, investment and GDP in an economy whose businesses spend €1 more on almost all knowledge investment is the same as an economy whose businesses turn up their air-conditioning. Therefore, we have put together a small-scale but focused team comprising some of Europe’s (and the world’s) leading experts on these questions, spanning business, policy and measurement interests. The project will collect data on a wide range of knowledge investment, at macro and micro levels, incorporate these into macro and micro performance measures and thus greatly improve our understanding of knowledge-driven economies and firms and policy."