Summary of Capitalism Without Capital

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For centuries, capital investment meant putting money into tangible assets – any physical object, from a horse to a computer. Today, the bulk of business investment involves intangibles such as knowledge, design, processes and branding, and not physical objects. Professor Jonathan Haskel and researcher Stian Westlake describe how intangible investments fundamentally differ from tangible assets and examine the influence of intangibles on major issues in modern economies. Because their writing can sometimes be unavoidably abstruse, Haskel and Westlake include helpful sidebars that explain basic economic concepts. getAbstract recommends their overview to venture capitalists, corporate executives, institutional investment managers, government policy makers, regulators and intellectual property specialists.

About the Authors

Jonathan Haskel is a professor of economics at Imperial College Business School in London. Stian Westlake is a senior fellow at Nesta, the United Kingdom’s national innovation foundation.



“The Rise of Intangibles”

For centuries, business investment centered on the acquisition of real assets, such as machines, tools, computers or office buildings. If a company liquidated, these physical items made up its remaining value. Until recently, tangible assets were the only business investments that statisticians counted in their calculations of national economic health.

Investment in intangible assets – ideas, designs, research, and the like – is growing. In some developed countries, including the United States, commercial investment in intangibles has eclipsed investment in physical assets.

This change has far-reaching significance. The “economic properties” of intangible assets differ from those of tangible assets. An economy rich in nonphysical assets should behave differently from a “tangible-intensive” economy. Since many statistical metrics don’t take intangibles into account, economists lack the data they need to explain some current aspects of the economy.

What Are Intangible Assets?

Intangible investments and assets include software, databases, scientific research, mineral prospecting, creative...

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