It is, therefore, important to review the extent of investment in knowledge across the EU as well as in fixed assets. This gives rise to somewhat different conclusions, since many of the countries with below average rates of fixed investment are among the largest investors in technology. France, the UK and Finland are similarly low investors in physical assets but high investors in knowledge. On the other hand, the three cohesion countries, as well as Ireland, spend less than average on investment in knowledge. While their high rate of expenditure on fixed capital formation is closing the gap in their capital stock with the rest of the EU, their low investment in less tangible assets is not a secure basis for longer-term growth in a digital age.
Formation is investment net of disposals.
Gross refers to the fact that it does not take into account depreciation or consumption of capital. Fixed means that only investment which is used for more than a year is considered. Gross capital stock is calculated by taking by cumulating past investment and deducting the cumulated value of investment that has been retired. Net capital stock includes depreciation and is thus probably the better measure. Throughout this analysis investment stock is therefore defined as net capital stock, although the results are very similar if gross capital stock is used.