The article examines the dependence of the growth rates of labor productivity on the growth rates of investments in fixed assets in Russian agriculture. The approach used in this work to assess the intensity of innovation activity in agriculture is based on the ratio of investment efforts and the resulting dynamics of labor productivity. It is revealed that in the period from 2013 to 2017, the growth rates of investments in fixed assets significantly exceeded the growth rates of productivity in the industry. The study of the dependence of the growth rates of labor productivity on the growth rates of investments in fixed assets showed a rather close relationship between these indicators (the correlation coefficient R = 0.57). The average coefficient of elasticity shows that given a change in the growth rate of investment in fixed assets by 1% of its average value, the growth rate of labor productivity in the period from 2013 to 2017 changed on average by 0.059%. The situation in Russian agriculture shows that in recent years, against the background of significant investments in fixed assets and growth of physical capital, the quality of this capital remained at a low level and could not ensure high and long-term growth in labor productivity. Additionally, an assessment of the intensity of innovation activity was conducted and an analysis of the factors was made, hindering the spread and introduction of breakthrough digital technologies. © 2019 by author(s) and VsI Entrepreneurship and Sustainability Center.