Cross-Country Estimates of Employment and Investment in Organisational Capital : A Task-Based Methodology Using the PIAAC Database

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. Occupations contributing to the generation of OC are identified using distribution-based criteria and clustering analysis. 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. In-house investment in OC for the 2012 is measured à la Corrado, Hulten and Sichel (2009), as 20% of wages paid to OC-related occupations. Estimates at the aggregate level suggest the share of OC occupations in total employment to represent between 9.5% (Denmark) to 26% (United Kingdom), with an average of 16%. 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, and total investment in OC is higher in services than in manufacturing. Experimental estimates of investment in OC by firm class size and by the private and public sector and are also proposed. In the services sector, small firms account for on average half of OC investment in that sector, while in manufacturing, 45% of OC investment comes from large firms. Finally, with only few exceptions, investment in OC appears to be higher in the public sector than in the private sector