When business use their equipment, it slowly gets worn down and worn out. Over time, the equipment isn't as efficient, isn't worth as much, or must be replaced. Thus the capital (another word for equipment) loses value -- this is called depreciation.
It could be that the economy isn't actually growing if there is an increase in Gross Investment. The depreciation of the capital could be greater than the growth in Gross Investment, meaning that there is actually a decrease in capital.
If there is an increase in Net Investment, then you know that gross investment is greater than depreciation, and the capital stock is growing, meaning there's more likely to be economic growth.
I hope you find this very informative
Regards,
Kimberly
