Public Support for Innovation, Intangible Investment and Productivity Growth in the UK Market Sector

Pressure on public finances has increased scrutiny of public support for innovation. We examine two particular issues. First, there have been many recent calls for the (relatively new) UK R&D subsidy to be extended to other “research” activities, such as software. Second, argument still rages about the efficacy of direct public spending on R&D via spending on academic research councils, universities, and government undertaken work on civil and military R&D. To evaluate these questions we use data on market sector productivity, R&D and non-R&D intangible assets, and public sector R&D spending. We look for evidence of market sector spillovers from intangible investment and from public R&D. We find (a) no evidence of spillover effects from intangible investment at the market sector level, including from R&D, (b) strong evidence of market sector spillovers from public R&D spend on research councils, and (c) no evidence of market sector spillovers from public spending on civil or defence R&D. Our findings tentatively suggest that for maximum market sector productivity impact government innovation policy should focus on direct spending on research councils.intangible assets, productivity, R&D, spillovers

The Effect of Skill shortages on Unemployment and Real Wage Growth: A Simultaneous Equation Approach

This paper attempts to quantify the effect of skill shortages on the UK labour market by developing a simultaneous equation model of unemployment and real wage growth. The model is developed following a structural approach based on a priori economic information and is initially estimated using a two-stage least squares procedure. The model is also estimated using Zellner's seemingly unrelated regressions estimation technique, with similar results. It is shown that skill shortages have a positive effect on real wage growth and a negative effect on unemployment, with both these effects economically and statistically significant.skill shortages, unemployment, wages, 2SLS

What Happened to the Knowledge Economy? ICT, Intangible Investment and Britain's Productivity Record Revisited

A major puzzle is that despite the apparent importance of innovation around the "knowledge economy", UK macro performance appears unaffected: investment rates are flat, and productivity has slowed down. We investigate whether measurement issues might account for the puzzle. The standard National Accounts treatment of most spending on "knowledge" or "intangible" assets is as intermediate consumption. Thus they do not count as either GDP or investment. We ask how treating such spending as investment affects some key macro variables, namely, market sector gross value added (MGVA), business investment, capital and labour shares, growth in labour and total factor productivity, and capital deepening. We find (a) MGVA was understated by about 6% in 1970 and 13% in 2004 (b) instead of the nominal business investment/MGVA ratio falling since 1970 it is has been rising (c) instead of the labour compensation/MGVA ratio being flat since 1970 it has been falling (d) growth in labour productivity and capital deepening has been understated and growth in total factor productivity overstated (e) total factor productivity growth has not slowed since 1990 but has been accelerating.Intangible assets, Productivity, R&D, Training, Organisational capital, Investment

Integrated estimates of capital stocks and services for the United Kingdom: 1950-2013

This paper presents annual estimates of fixed capital stocks and capital services for the United Kingdom, 1950-2013, for the whole economy and for the market sector. Our estimates cover eight asset types (structures, machinery, vehicles, computers, purchased software, own-account software, mineral exploration and artistic originals) and also a ninth, R&D, from 1981 to 2013. We compare the effect on the estimates of capital services of using either an exogenous (ex post) rate of return or an endogenous one. The latter uses a model which allows for ex ante risk: firms’ expectations may not be satisfied so the realised rate of return may not be equalised across assets. We see how much the inclusion of R&D matters. We also look at what has happened to capital intensity (capital services per hour worked) in the Great Recession, a period when labour productivity fell in the UK. And we consider the evolution of the aggregate depreciation rate and of capital consumption as a proportion of GDP

Capital stocks and capital services: integrated and consistent estimates for the United Kingdom, 1950–2013

The evolution of capital services is crucial for understanding labour productivity growth. Capital stocks and the wealth–income ratio are important for understanding welfare and inequality. Accordingly, we present annual estimates of fixed capital services and capital stocks for the United Kingdom, 1950–2013, for the whole economy and for the market sector. Our estimates cover nine asset types including R&D. We compare estimates of capital services based on an endogenous (ex post) rate of return with ones based on a hybrid method which allows for ex ante risk: firms' expectations may not be satisfied. Contrary to expectation, we find that capital intensity (capital services per hour worked) rose during the Great Recession even though labour productivity fell. And the wealth–income ratio is now substantially lower than it was in the early 1980s unless dwellings are included in the total

The diet-derived short chain fatty acid propionate improves beta-cell function in humans and stimulates insulin secretion from human islets in vitro

Aims: Diet-derived short chain fatty acids (SCFAs) improve glucose homeostasis in vivo, but the role of individual SCFAs and their mechanisms of action have not been defined. This study evaluated the effects of increasing colonic delivery of the SCFA propionate on β-cell function in humans and the direct effects of propionate on isolated human islets in vitro. Materials and Methods: For 24 weeks human subjects ingested an inulin-propionate ester that delivers propionate to the colon. Acute insulin, GLP-1 and non-esterified fatty acid (NEFA) levels were quantified pre- and post-supplementation in response to a mixed meal test. Expression of the SCFA receptor FFAR2 in human islets was determined by western blotting and immunohistochemistry. Dynamic insulin secretion from perifused human islets was quantified by radioimmunoassay and islet apoptosis was determined by quantification of caspase 3/7 activities. Results: Colonic propionate delivery in vivo was associated with improved β-cell function with increased insulin secretion that was independent of changes in GLP-1 levels. Human islet β-cells expressed FFAR2 and propionate potentiated dynamic glucose-stimulated insulin secretion in vitro, an effect that was dependent on signalling via protein kinase C. Propionate also protected human islets from apoptosis induced by the NEFA sodium palmitate and inflammatory cytokines. Conclusions: Our results indicate that propionate has beneficial effects on β-cell function in vivo, and in vitro analyses demonstrated that it has direct effects to potentiate glucose-stimulated insulin release and maintain β-cell mass through inhibition of apoptosis. These observations support ingestion of propiogenic dietary fibres to maintain healthy glucose homeostasis

Declines in Lung Function After Antiretroviral Therapy Initiation in Adults With Human Immunodeficiency Virus and Tuberculosis: A Potential Manifestation of Respiratory Immune Reconstitution Inflammatory Syndrome

End-organ impairment has received relatively little research attention as a possible manifestation of tuberculosis immune reconstitution inflammatory syndrome (TB-IRIS). In this prospective cohort study, one-half of adults with human immunodeficiency virus and pulmonary tuberculosis experienced meaningful declines in lung function on antiretroviral therapy, suggesting a role for lung function in TB-IRIS definitions

An ecological study to evaluate the association of Bacillus Calmette-Guerin (BCG) vaccination on cases of SARS-CoV2 infection and mortality from COVID-19

As the SARS-CoV2 pandemic has progressed, there have been marked geographical differences in the pace and extent of its spread. We evaluated the association of BCG vaccination on morbidity and mortality of SARS-CoV2, adjusted for country-specific responses to the epidemic, demographics and health. SARS-CoV2 cases and deaths as reported by 31 May 2020 in the World Health Organization situation reports were used. Countries with at least 28 days following the first 100 cases, and available information on BCG were included. We used log-linear regression models to explore associations of cases and deaths with the BCG vaccination policy in each country, adjusted for population size, gross domestic product, proportion aged over 65 years, stringency level measures, testing levels, smoking proportion, and the time difference from date of reporting the 100th case to 31 May 2020. We further looked at the association that might have been found if the analyses were done at earlier time points. The study included 97 countries with 73 having a policy of current BCG vaccination, 13 having previously had BCG vaccination, and 11 having never had BCG vaccination. In a log-linear regression model there was no effect of country-level BCG status on SARS-CoV2 cases or deaths. Univariable log-linear regression models showed a trend towards a weakening of the association over time. We found no statistical evidence for an association between BCG vaccination policy and either SARS-CoV2 morbidity or mortality. We urge countries to rather consider alternative tools with evidence supporting their effectiveness for controlling SARS-CoV2 morbidity and mortality