Flash Eurobarometer 369 - European Commissionec.europa.eu/commfrontoffice/publicopinion/flash/fl_369_sum_en.pdf · Drivers for Growth” (No 369), was conducted at the request of

Flash Eurobarometer 369

INVESTING IN INTANGIBLES: ECONOMIC ASSETS AND INNOVATION

DRIVERS FOR GROWTH

SUMMARY

Fieldwork: January – February 2013

Publication: May 2013

This survey has been requested by the European Commission, Directorate-General for Enterprise

and Industry and co-ordinated by Directorate-General for Communication.

This document does not represent the point of view of the European Commission.

The interpretations and opinions contained in it are solely those of the authors.

Flash Eurobarometer 369 - TNS Political & Social

FLASH EUROBAROMETER 369 “Investing in Intangibles”

1

Flash Eurobarometer 369

Investing in Intangibles: Economic Assets and Innovation Drivers for Growth

Conducted by TNS Political & Social at the request of

the European Commission,

Directorate-General for Enterprise and Industry

Survey co-ordinated by the European Commission,

Directorate-General for Communication

(DG COMM “Research and Speechwriting” Unit)


2

TABLE OF CONTENTS

INTRODUCTION .................................................................................................. 3

1. COMPANIES’ PRIORITIES AND THEIR INVESTMENTS IN INTANGIBLE ASSETS ............................. 5

2. THE NATURE OF THE COMPANIES’ INVESTMENTS IN INTANGIBLE ASSETS ................................ 8

3. DRIVERS AND BARRIERS FOR INVESTING IN INTANGIBLE ASSETS ............................................ 11

4. IMPACT OF INVESTMENTS IN INTANGIBLE ASSETS ................................................................... 13

ANNEXES

Technical Specifications


3

INTRODUCTION

This Flash Eurobarometer, “Investing in Intangibles: Economic Assets and Innovation

Drivers for Growth” (No 369), was conducted at the request of the Directorate-General

for Enterprise and Industry. The survey was designed to explore companies' investment

in a range of intangible assets. Intangible assets are non-financial, non-physical assets.

They are created over time and through investment, and are identifiable as separate

assets. They may add value to the company. Examples of intangible assets include

training, software development, reputation and branding, research and development, the

design of products and services or business process improvements. Intangible assets are

increasingly recognised as playing an important role in the growth of developed

economies, although their impact has been identified as difficult to quantify1.

More specifically the survey was designed to investigate:

The kinds of intangible assets companies invest in

Companies' use of internal or external resources when investing in intangible

assets

Why companies invest in intangible assets, and what barriers they perceive when

making such investments

The perceived length of benefit from investing in intangible assets

The links between innovation projects and investment in intangible assets

We would like to thank the Joint Research Centre of the European Commission for their

contribution to the questionnaire2.

This survey was carried out by TNS Opinion & Social network between 22nd January and

19th February 2013 in the 27 Member States of the European Union and in Croatia,

Iceland, Japan, Norway, Republic of Serbia, Switzerland, Turkey, the Former Yugoslav

Republic of Macedonia and the United States, where the same target group was

interviewed. It is a business to business survey co-ordinated by the Directorate-General

for Communication (“Research and Speechwriting” Unit). This survey covers businesses

employing 1 or more persons in the Manufacturing (NACE category C), Services (NACE

categories G/H/I/J/K/L/M/N/R) and Industry (NACE categories D/E/F). The sample was

selected from an international database, with some additional sample from local sources

where necessary.

1 http://www.iareg.org/index.php?id=23 2 The questionnaire was prepared under the scientific guidance of Sandro Montresor from the Institute for

Prospective Technological Studies (IPTS) of the JRC. The contribution of Giulio Perani, from the Italian National

Institute for Statistics (Istat), is acknowledged.


4

The methodology used is that of Eurobarometer surveys as carried out by the

Directorate-General for Communication (“Research and Speechwriting” Unit)3.. A

technical note on the manner in which interviews were conducted by the Institutes within

the TNS Political & Social network is appended as an annex to this report. Also included

are the interview methods and confidence intervals4.

Note: In this report, countries are referred to by their official abbreviation. The

abbreviations used in this report correspond to:

ABBREVIATIONS

BE Belgium LV Latvia

CZ Czech Republic LU Luxembourg

BG Bulgaria HU Hungary

DK Denmark MT Malta

DE Germany NL The Netherlands

EE Estonia AT Austria

EL Greece PL Poland

ES Spain PT Portugal

FR France RO Romania

IE Ireland SI Slovenia

IT Italy SK Slovakia

CY Republic of Cyprus* FI Finland

LT Lithuania SE Sweden

UK The United Kingdom

HR Croatia EU27 European Union – 27 Member States

TR Turkey

IS Iceland EU15 BE, IT, FR, DE, LU, NL, DK, UK, IE, PT, ES, EL, AT, SE, FI**

MK The former Yugoslav Republic of

Macedonia

NMS12 BG, CZ, EE, CY, LT, LV, MT, HU, PL, RO, SL, SK***

RS Republic of Serbia EURO AREA BE, FR, IT, LU, DE, AT, ES, PT, IE, NL, FI, EL, EE, SI, CY, MT, SK

NO Norway

CH Switzerland NO Norway

JP Japan CH Switzerland

US The United States

* Cyprus as a whole is one of the 27 European Union Member States. However, the ‘acquis communautaire’ has

been suspended in the part of the country which is not controlled by the government of the Republic of Cyprus.

For practical reasons, only the interviews carried out in the part of the country controlled by the government of the Republic of Cyprus are included in the ‘CY’ category and in the EU27 average.

** EU15 refers to the 15 countries forming the European Union before the enlargements of 2004 and 2007

*** The NMS12 are the 12 ‘new Member States’ which joined the European Union during the 2004 and 2007 enlargements

* * * * *

The Eurobarometer web site can be consulted at the following address:

http://ec.europa.eu/public_opinion/index_en.htm

We would like to take the opportunity to thank all the respondents across the continent

who gave their time to take part in this survey.

Without their active participation, this study would not have been possible.

3 http://ec.europa.eu/public_opinion/index_en.htm

http://ec.europa.eu/public_opinion/index_en.htmhttp://ec.europa.eu/public_opinion/index_en.htm


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1. COMPANIES’ PRIORITIES AND THEIR INVESTMENTS

IN INTANGIBLE ASSETS

- Tailored, customised solutions are the most important priority for companies -

Companies were asked to nominate the two most important priorities for their company

from a set list.

Within EU27, tailored, customised solutions are the most common priority (40%),

followed by decreasing productions costs (33%). Around one quarter mention ensuring

lower prices (26%), rapid development of new products or services and increasing labour

productivity (both 25%).

Base: All respondents = 8715 (EU27)

In 19 of the countries surveyed, tailored, customised solutions are the most

mentioned company priority. This is particularly the case for companies in Germany,

Austria (both 70%), Sweden (67%) and Switzerland (64%). At the other end of the

spectrum, 10% of companies in FYROM, 12% of Croatian and Cypriot companies say the

same.

4 The results tables are included in the annex. It should be noted that the total of the percentages in the tables

of this report may exceed 100% when the respondent has the possibility of giving several answers to the

question.


6

- Companies were more likely to invest using internal rather than external

resources for a range of activities in 2011 -

Companies were asked what percentage of their turnover was invested using internal

resources for in a range of activities in 2011.

At least half of all companies invested using internal resources for organisation or

business process improvements (60%), training (58%), and company reputation and

branding (52%). Just over one in four (41%) invested in product or service design, 39%

in software development and 32% in research and development.

In terms of the percentage of turnover spent, relatively few companies spent more than

15% of their turnover on any of these activities in 2011.


Companies were also asked the percentage of their total turnover that was invested in

the same a range of activities in 2011, but using only external providers.

Companies in the EU are most likely to have invested in external resources for training

(38%), followed by company reputation and branding (30%), software development and

organisation or business process improvements (both 26%). Just over one in five

companies (21%) invested in external resources for product or service design, while 15%

invested at least some turnover in R&D from external resources.

Fewer than one in ten companies invested more than 5% of turnover on any of these

activities using an internal provider - training is the most likely to have attracted this

level of investment (8%).


7


Investment in internal vs. external resources

Companies have relied more on internal resources rather than on external providers for

investing in these activities in 2011. For example, in the case of investments on

organisation or business process improvement, 60% of companies used internal

resources while 26% used external providers. The pattern is repeated for each activity.

The two activities that are most likely to have had investments into internal resources

are business process improvement (60%) and training (58%). The two activities that are

most likely to have attracted investment in external resources are training (38%) and

company reputation and branding (30%).


8

2. THE NATURE OF THE COMPANIES’ INVESTMENTS IN INTANGIBLE ASSETS

- One in ten companies that have invested in company reputation and

branding expect the benefit to last more than 10 years –

Companies that had invested in each of the activities (using either internal or external

resources) were asked how long the company expected to benefit from its investment.

Company reputation and branding is the only area where at least half of all

companies expect their investment to benefit for at least two years. In fact 11% expect

the benefit of their investment to last more than ten years. 49% of companies expect the

benefit of their investment in R&D to last 2 or more years, while 44% expect this length

of benefit from their investment in product or service design.

Base: companies that invested in each of the activities using either internal or external resources in 2011

(training=5514; software development=3986; company reputation and branding=4896; R&D=3067; design of

products and services=4005; organization or business process improvements=5487) (EU27)

Training is considered to have the shortest benefit period - 51% expect the benefit to

be felt for less than 2 years.


9

- Less than three in ten companies reported any of the intangible assets

discussed on their company balance sheet in 2011 -

Respondents whose company had made investments in intangible assets in 2011 were

asked whether R&D, software development or other intangible assets were reported in

their company's 2011 balance sheet.

One in five (20%) say that R&D had been reported on the balance sheet, while 17% say

software development was listed. Just under three in ten (29%) say their company had

reported another intangible asset investment such as training on the balance sheet.

Base: companies that invested in each of the activities using

either internal or external resources in 2011 (R&D=7074; software development=7039; others=7256) (EU27)


10

Portuguese (45%) and Maltese5 (42%) companies are the most likely to have reported

R&D investment as intangible assets on their 2011 balance sheet, as have 34% of

Cypriot companies. In contrast 4% of Icelandic and 5% of Latvian and Estonian

companies did the same.

Base: companies that invested in research and development (R&D) using

either internal or external resources in 2011 =7074 (EU27)

5 Results for Malta should be interpreted with caution due to small sample size (N=43)


11

3. DRIVERS AND BARRIERS FOR INVESTING IN INTANGIBLE ASSETS

- Better relationships with customers and business partners is the main

motivation for investing in intangible assets -

Companies that invested in any intangible assets were asked whether a range of reasons

had motivated them to make these investments.

More than half (55%) were motivated by better relationships with customers or business

partners, while 43% mention greater efficiency of internal business processes and 42%

say better economic returns or larger market shares.

One third mentions more rapid development of new products or services and improving

internal skills on the intangible assets (both 33%). More than one in five (23%) were

motivated by their industry's regulatory framework, while 13% were motivated by public

financial support.


either internal or external resources in 2011 = 7588 (EU27)

In all but three countries better relationships with customers and business

partners is the most mentioned motivator for investing in intangible assets. The

exceptions are Estonia, where more rapid development of new company services or

products is most mentioned (22%), and Iceland and Serbia, where better economic

returns or larger market share is most mentioned (64% and 45% respectively).

In 25 countries at least half of all companies were motivated to invest in an intangible

asset by better relationships with customers and business partners. This is

particularly the case for companies in Portugal (79%), Finland (77%) and Norway (76%),

but is least likely to be the case for Estonian (19%) and Japanese companies (22%).


12

- High costs are the main discouragement to investing in intangible assets -

Companies that invested in any intangible assets were asked whether a range of factors

had discouraged them from making these investments.

High costs are the main discouragement to investing in intangible assets (45%), followed

by limited public financial support (35%) and unfavourable tax treatment of intangible

assets 33%).

Just under one quarter mention the regulatory framework of their industry being difficult

to understand (24%), while 23% mention accounting rules for reporting capital

expenditure as difficult to understand. Just under one in twenty (19%) mention limited

external sources of information or expertise as a discouragement to investing in

intangible assets.



High costs are the most mentioned discouragement in 30 of the 36 countries studied.

Companies in Portugal (66%), Turkey (64%) and Greece (55%) are the most likely to

mention this factor, compared to 11% of Estonian and 18% of Japanese companies.

Greece is the only country where at least half of all companies mention limited public

financial support as a discouragement to investing in intangible assets (58%).


13

4. IMPACT OF INVESTMENTS IN INTANGIBLE ASSETS

- The skills and qualifications of employees are seen as the biggest beneficiary

from an investment in intangible assets -

Companies that invested in any of the intangible assets discussed were asked if their

investment had benefited their company in a range of areas.

The skills and qualifications of employees are seen as the biggest beneficiary from

an investment in intangible assets - one in five say there has been a lot of benefit (21%),

compared to 11% that say this about the overall value of the company and 10% that say

this about sales.




14

Seven out of ten companies in Cyprus (74%), Finland (72%), Luxembourg and Austria

(both 70%) say that the skills and qualifications of employees have benefited from

the investment in intangible assets. Cypriot (46%), Austrian (38%) and Swiss (36%)

companies are the most likely to say that there has been 'a lot' of benefit.

Companies in FYROM (42%), Czech Republic (36%), Portugal and Romania (both 33%)

are the most likely to say there has been little benefit, while companies in the US (37%)

and the UK (31%) are the most likely to say there has been no benefit in terms of skills

and qualifications of employees.

Base: companies that invested in each of the activities using either internal or external resources in 2011

= 7588 (EU27)

- Companies are most likely to have introduced new or significantly improved

products, services, or processes between 2009 and 2011 -

All companies were asked if they had introduced a range of new or significantly improved

aspects of their business between 2009 and 2011.

More than four out of ten (42%) introduced new or significantly improved products,

services or processes, 28% introduced new or significantly improved organisational

structures and management methods, while 27% introduced new or significantly

improved marketing strategies or distribution methods.


15


Finally, companies that introduced new or significantly improvements in one of the areas

discussed above, and that also invested in intangible assets, were asked what proportion

of these investments in the period 2009-2011 were related to innovation projects.

The amount of intangible asset investment directed to innovation projects between 2009

and 2011 does not vary greatly across different areas: 26% of companies say that more

than 5% of their investment in research and development was related to innovation

projects, (highest) compared to 19% of companies that directed this proportion of

investment in training to innovation projects (lowest)

Base: companies that introduced new or significant improvements in one of the areas and those that invested

in each of the activities using either internal or external resources in 2011 (training=3349; software

development=2605; company reputation and branding=3187; R&D=2218; design of products and

services=2718; organisation or business process improvements=3473) (EU27)

TECHNICAL SPECIFICATIONS


TS1

FLASH EUROBAROMETER 369 “Investing in Intangibles: Economic Assets and Innovation Drivers for Growth”

TECHNICAL SPECIFICATIONS Between the 22nd of January and the 19th of February 2013, TNS Political & Social, a consortium created between TNS political & social, TNS UK and TNS opinion, carried out the survey FLASH EUROBAROMETER 369 about “Investing in Intangibles: Economic Assets and Innovation Drivers for Growth”. This survey has been requested by the EUROPEAN COMMISSION, Directorate-General for Enterprise and Industry. It is a general public survey co-ordinated by the Directorate-General for Communication (“Research and Speechwriting” Unit). The FLASH EUROBAROMETER 369 covers the population of the respective nationalities of the European Union Member States, resident in each of the 27 Member States and aged 15 years and over. It was also conducted in Croatia, Iceland, Japan, Norway, Republic of Serbia, Switzerland, Turkey, the Former Yugoslav Republic of Macedonia and the United States. The survey covers the national population of citizens in these countries as well as the population of citizens of all the European Union Member States who are residents in these countries and have a sufficient command of the national languages to answer the questionnaire. All interviews were carried using the TNS e-Call center (our centralized CATI system). In every country respondents were called both on fixed lines and mobile phones. The basic sample design applied in all states is multi-stage random (probability). In each household, the respondent was drawn at random following the "last birthday rule". TNS has developed its own RDD sample generation capabilities based on using contact telephone numbers from responders to random probability or random location face to face surveys, such as Eurobarometer, as seed numbers. The approach works because the seed number identifies a working block of telephone numbers and reduces the volume of numbers generated that will be ineffective. The seed numbers are stratified by NUTS2 region and urbanisation to approximate a geographically representative sample. From each seed number the required sample of numbers are generated by randomly replacing the last two digits. The sample is then screened against business databases in order to exclude as many of these numbers as possible before going into field. This approach is consistent across all countries.


TS2

Readers are reminded that survey results are estimations, the accuracy of which, everything being equal, rests upon the sample size and upon the observed percentage. With samples of about 1,000 interviews, the real percentages vary within the following confidence limits:

various sample sizes are in rows various observed results are in columns

5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

95% 90% 85% 80% 75% 70% 65% 60% 55% 50%

N=50 6,0 8,3 9,9 11,1 12,0 12,7 13,2 13,6 13,8 13,9 N=50

N=500 1,9 2,6 3,1 3,5 3,8 4,0 4,2 4,3 4,4 4,4 N=500

N=1000 1,4 1,9 2,2 2,5 2,7 2,8 3,0 3,0 3,1 3,1 N=1000

N=1500 1,1 1,5 1,8 2,0 2,2 2,3 2,4 2,5 2,5 2,5 N=1500

N=2000 1,0 1,3 1,6 1,8 1,9 2,0 2,1 2,1 2,2 2,2 N=2000

N=3000 0,8 1,1 1,3 1,4 1,5 1,6 1,7 1,8 1,8 1,8 N=3000

N=4000 0,7 0,9 1,1 1,2 1,3 1,4 1,5 1,5 1,5 1,5 N=4000

N=5000 0,6 0,8 1,0 1,1 1,2 1,3 1,3 1,4 1,4 1,4 N=5000

N=6000 0,6 0,8 0,9 1,0 1,1 1,2 1,2 1,2 1,3 1,3 N=6000

N=7000 0,5 0,7 0,8 0,9 1,0 1,1 1,1 1,1 1,2 1,2 N=7000

N=7500 0,5 0,7 0,8 0,9 1,0 1,0 1,1 1,1 1,1 1,1 N=7500

N=8000 0,5 0,7 0,8 0,9 0,9 1,0 1,0 1,1 1,1 1,1 N=8000

N=9000 0,5 0,6 0,7 0,8 0,9 0,9 1,0 1,0 1,0 1,0 N=9000

N=10000 0,4 0,6 0,7 0,8 0,8 0,9 0,9 1,0 1,0 1,0 N=10000

N=11000 0,4 0,6 0,7 0,7 0,8 0,9 0,9 0,9 0,9 0,9 N=11000

N=12000 0,4 0,5 0,6 0,7 0,8 0,8 0,9 0,9 0,9 0,9 N=12000

N=13000 0,4 0,5 0,6 0,7 0,7 0,8 0,8 0,8 0,9 0,9 N=13000

N=14000 0,4 0,5 0,6 0,7 0,7 0,8 0,8 0,8 0,8 0,8 N=14000

N=15000 0,3 0,5 0,6 0,6 0,7 0,7 0,8 0,8 0,8 0,8 N=15000

5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

95% 90% 85% 80% 75% 70% 65% 60% 55% 50%

Statistical Margins due to the sampling process

(at the 95% level of confidence)


TS3

ABBR. COUNTRIES INSTITUTES N° INTERVIEWS FIELDWORK

DATES POPULATION

15+

BE Belgium TNS Dimarso 300 28/01/2013 11/02/2013 572.234 BG Bulgaria TNS BBSS 301 29/01/2013 04/02/2013 294.587 CZ Czech Rep. TNS Aisa s.r.o 302 28/01/2013 08/02/2013 995.870 DK Denmark TNS Gallup A/S 302 28/01/2013 12/02/2013 280.192 DE Germany TNS Infratest 499 28/01/2013 14/02/2013 2.176.111 EE Estonia TNS Emor 205 28/01/2013 29/01/2013 54.526 EL Greece TNS ICAP 300 28/01/2013 14/02/2013 535.717 ES Spain TNS Demoscopia S.A 500 28/01/2013 13/02/2013 2.599.951 FR France TNS Sofres 500 28/01/2013 15/02/2013 2.707.181 IE Ireland IMS Millward Brown 300 28/01/2013 19/02/2013 164.047 IT Italy TNS ITALIA 500 28/01/2013 15/02/2013 3.974.602 CY Rep. of Cyprus CYMAR 100 28/01/2013 31/01/2013 47.794 LV Latvia TNS Latvia 202 28/01/2013 14/02/2013 83.951 LT Lithuania TNS LT 202 28/01/2013 31/01/2013 118.312 LU Luxembourg TNS Dimarso 100 28/01/2013 11/02/2013 29.618 HU Hungary TNS Hoffmann Kft 300 28/01/2013 13/02/2013 586.603

MT Malta MISCO International Ltd 100 28/01/2013 13/02/2013 49.233

NL Netherlands TNS NIPO 500 28/01/2013 15/02/2013 888.380 AT Austria TNS Austria 300 28/01/2013 14/02/2013 311.258 PL Poland TNS OBOP 500 28/01/2013 13/02/2013 1.557.706 PT Portugal TNS EUROTESTE 300 28/01/2013 07/02/2013 893.812 RO Romania TNS CSOP 501 28/01/2013 08/02/2013 455.192 SI Slovenia RM PLUS 200 30/01/2013 11/02/2013 119.908 SK Slovakia TNS AISA Slovakia 300 28/01/2013 15/02/2013 414.824 FI Finland TNS Gallup Oy 300 28/01/2013 14/02/2013 236.687 SE Sweden TNS SIFO 301 28/01/2013 14/02/2013 677.320 UK United Kingdom TNS UK 500 28/01/2013 14/02/2013 1.747.419

TOTAL EU27

8.715

28/01/2013

19/02/2013 22.573.035

HR Croatia Puls 200 29/01/2013 11/02/2013 166.195 TR Turkey TNS PIAR 400 28/01/2013 15/02/2013 3.122.434 MK Former Yugoslav Rep. of

Macedonia TNS Brima 200 31/01/2013 07/02/2013 61.287

IS Iceland Capacent ehf 200 28/01/2013 11/02/2013 17.403 NO Norway TNS Gallup AS 200 28/01/2013 13/02/2013 295.122 RS Republic of Serbia TNS Medium Gallup 201 31/01/2013 11/02/2013 82.355 US United States TNS Custom Research 501 22/01/2013 15/02/2013 14.510.761 CH Switzerland ISOPUBLIC 200 01/02/2013 13/02/2013 146.219 JP Japan Research Freeway 500 22/01/2013 15/02/2013 2.049.141

TOTAL

11.317

28/01/2013

19/02/2013 43.023.952

Documents

Flash Eurobarometer 369 - European Commissionec.europa.eu/commfrontoffice/publicopinion/flash/fl_369_sum_en.pdf · Drivers for Growth” (No 369), was conducted at the request of