Intangible Capital and Economic Growth

Abstract

Despite increasing research efforts, there remains much confusion regarding the nature of and contribution of the most intangible forms of capital. This paper develops a comprehensive and unifying conception of intangible capital in order to understand its contribution to economic growth. Intangible capital is defined to include standard human capital, noncognitive human capital, social capital, and other intangible manifestations of human capacity. The arguments and evidence presented indicate that intangible capital is extremely important for explaining economic growth. The lesson for economists is that intangible human capacities should be at the forefront in efforts to understand and foster economic growth.

Keywords: Economic Growth, Intangible Capital, Human Capital, Social Capital, Noncognitive Human Capital

JEL Classification: J24, O40