The Moment is Now to Leverage Our Knowledge Intangibles

Intangibles make up 70% of the value of the average company. They drive competitive advantage. They determine the innovation capacity of a company. Yet they continue to be ignored.

And now we are at a moment of truth. Our economy seemingly made huge progress in the past decades. Computers created efficiencies and fueled profits. They also enabled many white collar jobs to be moved off shore along with manufacturing work. The economic consequences of this outsourcing and the mothballing of so much of our economic infrastructure were hidden by a series of economic booms in the 1990’s and early 2000’s. Then the “Great Recession” of 2008-09 exposed the fact that our economy was running on consumer spending fueled by financial profits that have long since disappeared. Today, we lack sources of job creation and true economic growth. Add to this economic challenge the even greater ones created by serious concerns about our environment, our energy use, our health care system, even our food production. We are in a very difficult position.

What will it take to face these challenges? How can we as a nation convert these enormous challenges into opportunities that can fuel a new century of growth and prosperity? The answers lie in how we leverage the enormous intangible capital of American business. The seeds of the future already exist in the minds of our workers and in the collection of knowledge—the intangible capital—of our organizations. But we are not going to rise to these challenges by ignoring this same intangible capital in our management information and practices. We must use our intangible capital, not to re-create the past but to create a new future.

The times, the challenges and the opportunities demand that we develop intangibles management capabilities to move almost every sector of our economy into the knowledge era:

• Re-create manufacturing in a new knowledge-intensive and sustainable form
• Change energy production and use across our entire economy
• Create a sustainable, healthy food system
• Re-think education at every level
• Use our greatest resource—our collective knowledge—to fuel a new era of prosperity.

All of these goals are necessary and possible. But they would be impossible to achieve without knowledge intangibles: people, knowledge and networks. Don’t ignore these critical resources.

From Intangible Capital: Putting Knowledge to Work in the 21st Century Organization
Technorati Tags: intangible capital, intangibles, recession, knowledge, knowledge era