From this James Pethokoukis post at The Week:
The missing link in the anemic, five-year-old recovery has been business investment. And big business itself deserves a lot of the blame for that. Instead of using record profits to buy new equipment or build factories — and boost the economy — corporate America has been sitting on nearly $2 trillion in cash. Corporate balance sheets are stuffed.
When CEOs do put money to work, it's almost always to help shareholders, through higher dividends and stock buy-backs that boost share prices. More recently, companies have been using some of that dough for a tricky financial technique known as an "inversion," buying an overseas rival to take advantage of lower international tax rates. Never have companies spent such a tiny share of the cash they generate on capital investment, according to economist Andrew Smithers.
Even worse, argues Harvard's Clayton Christensen in a recent paper, much of that investment is directed toward making existing products or delivering existing services more efficiently — often with fewer workers — rather than innovating new products or services that create new, high-paying jobs. This plague of risk-averse "short-termism," as Nobel-winning economist Edmund Phelps writes in Mass Flourishing, reduces the total "supply of innovation" in the U.S. economy, resulting in slower growth and job creation.