Presented by Chris Warmington, University of York
In recent times, economies have increasingly moved from the use and production of tangible assets to non-physical, intangible assets, such as data and branding etc. Intangible assets are highly synergetic, scalable, less rivalrous and appropriable than tangible assets and lead to knowledge spillovers, making them key drivers of productivity.
Significant efforts have been devoted to measuring intangible assets in the private sector. However, the healthcare/public sector has received comparably little attention, despite its importance in healthcare, as shown by the drive towards digitalisation in the recent NHS ten year plan.
This webinar will critically review the literature on the measurement of intangible assets in the healthcare and public sectors, addressing three key questions:
- What methods are used to measure these intangible assets?
- What specific challenges arise in measuring them?
- What would be the effect of including them in NHS productivity measurement?
We identified 31 publications and two broad strands of literature: the intellectual capital literature, which uses indicator and survey-based methods to measure intangibles and the Corrado, Hultens and Sichel (CHS) framework literature, which uses national accounts style methods, namely the market purchase price and sum-of-costs approaches.
We found that the intellectual capital literature’s taxonomy and methods were not standardised, limiting the comparability of their estimates. The CHS methods were more standardised and comparable, but relied on assumptions that may not hold in the public sector. The lack of market prices, market pressures and the non-financial aims of the public sector make the measurement of intangibles challenging.
These effects were, however, generally underexplored except in the case of organisational capital. The effects of including intangible assets in NHS productivity statistics were also underexplored.
Based on the findings of the review, we propose a novel income method for the valuation of intangible assets in the public sector. Using data from the NHS App Historical Activity and NHS App Benefits Estimates for the years 2017/18 – 2024/25, we employ the expected future income method. Provisional estimates indicate that its valuations are very different from those obtained with the sum-of-costs valuation.
Presenter bio
Chris Warmington is a Pre-Doctoral Fellow at the Centre for Health Economics, University of York.
Discussant: Mary O’Mahony, King’s College London
Chair: Darren Morgan, ESCoE