Intangible Asset Global Shift

February 10th, 2017. Published under Fiduciary Responsibility, Intangible asset training for management teams., Intangibles as strategic assets. No Comments.

Michael D. Moberly February, 10, 2017 A business blog where attention span really matters!

Indeed, country economies have rapidly entered and connected to an era irreversibly intertwined, at all levels and functions, in which IA’s (intangible assets) are the overwhelmingly dominant ‘players and actors’ as sources of revenue, value, competitive advantage, and sustainability, all of which I believe, we are in the early stages.

This translates as most companies and businesses, irrespective of sector, are, whether recognized or not, have shifted economically away from reliance on – applications of tangible-physical assets to being irreversibly attached to – dominated by intangible – non-physical assets. In other words, the IA era which influenced growing percentages of business – company leadership and management teams to engage their IA’s (functionally, operationally, competitively, and monetarily), some for the first time, is now indeed, for many, a permanent component to c-suite agenda’s.

That is not to suggest dependence – reliance on (conventional) tangible – physical assets has been completely eliminated to the point of absence. Instead, it means business leadership are variously (fiduciarily) obliged to recognize that business competitiveness, value, and revenue generation, etc., require IA inputs to achieve desired outcomes.

Starting in the mid-to-late 1990’s, I had the good fortune, and perhaps good sense, while faculty engaged in security-asset protection studies at Southern Illinois University, to read-study early products (chapters) of a multi-year project undertaken by The Brookings Institution titled ‘Understanding Intangible Sources of Value’. The principle investigators-authors of the project, several of whom I engaged at the time in discussion for clarity and insight, were a strong troupe of forward looking-thinking professionals. Most, to my recollection, were not exclusively schooled in economics per se, but never-the-less, experienced and respected practitioners who clearly understood the impending prominence – dependence on IA’s. For me, that Brookings’ project remains a very insightful treatise, certainly equal to the fine work on IA’s developed-produced at prominent institutions in the UK and Sweden.

To be sure, IA’s, still prompts some debate in certain quarters, debate that is less about the existence and presence of IA’s, and their contributory role and value they consistently play in business operability, innovation, and transactions, etc., and more about how to report IA’s relative to convention and profession specific standards, practices, and statutes.

Arguably, the IA ‘sea change’ for business, grew out of various consternations that conventional financial statements and balance sheets largely dominated by ‘tangible assets’ and to the exclusion or, at the very least, minimization of IA’s. Among the key arguments of IA proponents, aspects of which remain today, is that continued adherence to conventional asset reporting and accounting, (that essentially excludes IA’s) is insufficient, insofar as painting a complete and accurate portrait of a company’s financial wealth, health, potential, and competitive standing. This argument is all-the-more-relevant now, given the economic fact that substantial percentages (80+%) of most company’s value, revenue, and competitive advantage derived directly from IA’s.

Leave a Comment