Researchers at Imperial have found that the UK's investment in knowledge has improved more than previously reported, according to a new report.

Professor Jonathan Haskel and Dr Peter Goodridge from Imperial College Business School have found that when business investment in intangible assets is measured it shows that the UK’s economy is performing better than previously reported.

An example of an intangible asset includes the data generated by supermarkets every time a shopper swipes their loyalty card when purchasing their goods.This information is a valuable asset to the store because they can use the data to determine a shopper’s preference, which enables them to market more products to them.

The report authors have found that businesses are spending more on intangible investments, reaching £137 billion in 2011. They also found that these investments held up better during the recession, and have grown significantly since. These activities are particularly relevant in the UK, where the majority of the economy comes from services rather than manufacturing

In contrast, the report authors found that tangible business investments such as new vehicles, buildings and machinery have declined, reaching £89.8 billion in 2011.

While figures show the UK is lagging behind other countries in terms of tangible investments, measures based on intangible investment show the opposite picture, with the UK being among the leading economies in the world.

The report was funded by innovation charity Nesta.

Maxine Myers caught up with Professor Haskel to find out about the report. The pair discusses why companies are increasing their intangible innovation and why tangible investments are declining, along with some of the surprises coming out of the report.