Business investment in the era of digital transformation
The weak performance of business investment across the OECD since the Global Financial Crisis holds back potential growth. However, it masks a strong investment dynamic in digital assets such as hardware, software, and databases. This column describes how this divergence between digital and non-digital assets has intensified from the mid-2010s. The strong investment performance of the US relative to the rest of the OECD is almost exclusively a digital phenomenon. A ‘digital divide’ is emerging, where laggard countries are accumulating digital capital per worker more slowly than those with higher initial starting levels.
The weak performance of business investment across the OECD since the Global Financial Crisis holds back potential growth. However, it masks a strong investment dynamic in digital assets such as hardware, software, and databases. This column describes how this divergence between digital and non-digital assets has intensified from the mid-2010s. The strong investment performance of the US relative to the rest of the OECD is almost exclusively a digital phenomenon. A ‘digital divide’ is emerging, where laggard countries are accumulating digital capital per worker more slowly than those with higher initial starting levels.
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