Previous research regarding intangible assets and their possible influence over the effectiveness encourages governments to change their perspectives towards the assessment of economic effectiveness. Tangible assets such as equipment, plant, office buildings are no longer considered as competitive resources contributing towards long lasting competitive sustainability (Benevene and Cortini, 2010; FĂDUR, 2013). Thereafter intangible assets are becoming the drivers of a long lasting competitive advantage in economy (Suriñach and Moreno, 2012; Mackevičius and Jarmalaite, 2011; Fadur etc., 2013; Goodridge etc., 2013). Countries, such as United Kingdom, Japan and the United States, have already exceeded the investments in the intangible assets as a share of Gross Domestic Product (GDP)compared to the investments in tangibles (Corado et al, 2013; Goodridge, 2013). In July 31, 2013 the United States Bureau of Economic Analysis adopted a policy where Research and Development (R&D) were categorized as an investment on the government’s books rather than an expense (BEA, 2013). Corado et al (2012) argues that capitalizing intangible assets changes the perspective of the indicators that account for economic effectiveness. Chua and Goh (2009) pointed out, that gaining and sustaining the competitive advantage for an economy, one has to identify main components of the intangibles, invest accordingly and capture the return from these investments. Many studies have concluded that investments in intangible assets increase future output and consumption for the entire economy (COINVEST, 2013; INNODRIVE, 2013, INTAN Invest, 2011). According to Corado et al (2012) the key point again is whether an increase in intangibles yields returns at some point in the future in the form of higher production efficiency and improved product quality. Webster and Jensen (2006) argues, that certain intangible assets do not meet the characteristics associated with the investment. They are not identifiable, non-rival, sometimes they are not even assessable, therefore quantitative assessment on the returns of the investments of the intangible assets might be challenging. Intangible asset policy in Lithuania follows traditional accounting principles, where most of the intangibles are excluded from the government books. Statistics department provides certain macro level data such as investments into R&D. Konstatinos et all (2013) defended, that the size of the investment in R&D is not enough to get a grasp of the intangible asset essence and impact in the economy. According to the study carried out in France, the investment into R&D starting 1995 up to 2010 has increased by 1,9 percent, although the investments into other intangible assets such as human capital, knowledge, networks etc. has followed the increase from 7,4 percent up to 10,6 (OECD, 2013). Such data implies that intangible assets other than R&D are more substantial to our economies, therefore, it is important to identify those assets, asses the investment accordingly and measure the impact of these investments on the economic effectiveness. Purpose –The objective of this paper is to investigate intangible investments in Lithuania and assess their impact on the economic effectiveness. Design/methodology/approach – Analysis and review of scientific literature, and data statistical analysis. Originality/value – The present study represents a step forward in the understanding of the impacts of intangible assets on economy effectiveness in Lithuania, which still follows traditional accounting practice. The study was performed at the macro level using adaptive model proposed by Corado (2012), where intangible assets are categorized as computerized information, economic competencies and innovative property. The model was adjusted to the available data. The results show the investment level of the intangibles as well as the association with the economic effectiveness of the state. Practical implications –Knowledge based economy requires innovative methods to assess its effectiveness. Lithuania’s policies regarding intangible assets follows traditional theories, therefore it is very important to identify the level of intangible investments, not recorded in the accounting books and define it’s impact on the economical effectiveness and this will add value to the current status and contribute to a better assessment. Such study provides a benchmark possibility, which would be useful for Lithuania’s potential.
Keywords – Intangible assets, economic effectiveness, intangible asset assessment, intangible investment