Economists say investing in equipment, technology, and worker training are keys to improving the economy for both businesses and workers. Yet data show businesses have been doing less investing relative to the size of the economy in recent decades. What’s the cause of this shortfall?
- Very important question and the subject of some major research published recently by the Brookings Institute
- Research found three factors
- Biggest factors is intangible investments – nature of investments has changed –more in developing reputations, access to markets, and intellectual property – and are not traditional investments – so not counted
- also concentration in several industries – means less competition – so companies may not feel as compelled to invest
- last – globalization – more operations outside of the country