Cross-country estimates of employment and investment in organisational capital : a task-based methodology using PIAAC data

This work proposes a task-based methodology for the measurement of employment and investment in organisational capital (OC) in 20 OECD countries. It builds on the methodology of Squicciarini and Le Mouel (2012) and uses information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). OC is defined as firm-specific organisational knowledge resulting from the performance of tasks affecting the long-term functioning of firms, such as developing objectives and strategies; organising, planning and supervising production; and managing human resources. Cross-country heterogeneity in OC-related occupations emerges: while 20 occupational classes of the International Standard Classification of Occupations (ISCO 2008) are on average identified as being OC-related, country-specific values range between 14 (in Korea) and 24 occupations (in Poland). A core group of managerial occupations are consistently identified as OC occupations across countries, whereas differences arise in the selection of professionals and associate professionals in science and engineering, health, education, and business administration. Estimates suggest the share of OC occupations in total employment to amount to 16% on average, with country-specific values that vary between 9.5% (Denmark) and 26% (United Kingdom); and that total investment in OC, as a share of value-added, ranges from 1.4% in the Czech Republic to 3.7% in the United Kingdom, with an average 2.2% across all countries. Managers appear to account for less than half of total employment and investment in OC. Total investment in OC results higher in services than in manufacturing. In the services sector, on average half of investment in OC comes from small firms, while in manufacturing, 45% of investment in OC comes from large firms. Finally, the importance of OC investment in the public sector is investigated. With only few exceptions, investment in OC is higher in the public sector than in the private sector. These estimates of OC investment can be used to analyse its role with respect to skill use and mismatch, its impact on the routinisation of tasks and resulting polarisation of wage distribution, and its role in firms' integration and upgrading along global value chains (GVC).