Investment is an expenditure from which future returns are expected. The portion of past investments that retains potential for future returns is referred to as capital. If capital can be touched, it is tangible; otherwise, it is intangible. Brands and patents are examples of intangible capital.
For decades, Finland has been making more investments in intangible rather than tangible productive assets. However, due to the different accumulation and obsolescence of the two capital types, Finland’s productive capital stock is still predominantly tangible.
Finland and Germany are similar in terms of intangible capital. In contrast, Sweden invests significantly more in intangible capital than Finland and also utilizes these investments more efficiently.
Finland’s intangible capital (per hour worked) is only two-thirds of that in Sweden. The capital related to software, databases, and data in Sweden is four times greater than in Finland.
