The European Central Bank published analysis tracking the evolution of digital investment in the euro area and its growing role in business investment, using proxy measures to address limited granularity in official investment statistics. The work finds a widening split between tangible and intangible investment since 2020, with digital-related spending increasingly underpinning investment dynamics and indicators suggesting an acceleration in 2025, even as the euro area remains behind the United States on comparable measures. By the end of 2025, intangible assets including intellectual property products such as software, databases and research and development accounted for around 80% of the cumulative expansion in euro area business investment since the fourth quarter of 2019. The ECB’s digital investment proxy combines non-residential construction in the information and communication sector as a proxy for physical digital infrastructure, investment in information and communications technology equipment in the business economy, and intangible digital investment captured through intellectual property products in the information and communication sector plus software and databases investment in the rest of the business economy. On this basis, digital investment increased between 2014 and 2024 by more than three times cumulative GDP growth, driven mainly by intangibles, with ICT equipment contributing materially and data centre construction remaining relatively small. A timelier proxy based on monthly production in software publishing, computer programming, consultancy and information services points to faster growth in 2025, while also highlighting that much domestic production is recorded as intermediate consumption rather than capitalised investment and that national practices differ across countries. Extending the proxy using 2025 digital services output growth and excluding distortions from Ireland’s intellectual property products volatility suggests euro area digital investment may have risen by just over 60% between 2014 and 2025, compared with more than a doubling in a similar United States proxy, supported by a 2025 pick-up in data centre investment. Looking ahead, the ECB expects the digital share of investment to keep rising, supported by venture capital and Next Generation EU funding, alongside EU-wide initiatives such as the AI Continent Action Plan and the Apply AI Strategy. The analysis also notes potential constraints including energy supply, shortages of skilled staff and overregulation, and points to the System of National Accounts 2025, expected to be implemented in 2029-30, as a source of improved measurement of AI, data, cloud computing and digital intermediaries.
European Central Bank 2026-03-31
European Central Bank research shows euro area digital and intangible assets are driving investment growth while still lagging the United States
The European Central Bank published analysis showing that digital-related investment has increasingly driven euro area business investment since 2020, with intangible assets such as software, databases and research and development accounting for around 80% of cumulative investment growth since late 2019. ECB proxy measures indicate euro area digital investment rose by just over 60% between 2014 and 2025, lagging a comparable United States proxy where digital investment more than doubled. The ECB expects the digital share of investment to keep rising, supported by venture capital, Next Generation EU funding and EU-wide AI initiatives, while highlighting constraints such as energy supply, skills shortages and overregulation.