In the measurement of performance, it is net investment which is important as it
leads to a growth in the productive potential of organisations. It can be of two types:
capital widening, which involves the use of more capital but with the same
capital/labour ratio; or capital deepening, which increases the capital/labour ratio. A
replication of a production line would be an example of the former and increased mechanisation
of a production line would be an example of the latter. Table 8.4 shows net
investment as a percentage of gross investment over a specified period of time.