A recent OECD-based analysis finds that real investment across advanced economies is about 23% below the trend that prevailed before the 2008 financial crisis, helping to explain persistently weak growth in Europe and other developed regions. The study attributes the shortfall only partly to elevated business uncertainty stemming from the financial crisis, trade tensions, climate policy, the COVID-19 pandemic and the resulting fragmentation of global supply chains.

A larger share of the explanation lies in structural change: a pronounced shift toward intangible investments—software, data solutions, hardware and R&D—has raised the economy’s risk profile. Intangible assets tend to carry greater uncertainty and require higher expected returns, so even with historically low capital costs firms increasingly tighten investment hurdles and invest less.

The effect is uneven across countries. Caution is stronger where adoption of digital technologies lagged over the past decades, notably in parts of Europe such as Italy and Germany. By contrast, economies that maintained more “traditional” investment patterns, for example Poland, show investment levels closer to pre-crisis trends. The Czech Republic sits in the lower half of the OECD but notably outperforms Germany. #OECD #Europe #investment #R&D #FiatNews