Capitalism Without Capital: The Rise of the Intangible Economy
Professor Jonathan Haskel and Stian Westlake illuminate some of the important changes that have occurred in the global economy over recent decades.
Abstract: Early in the twenty-first century, a quiet revolution occurred. For the first time, the major developed economies began to invest more in intangible assets, like design, branding, R&D, and software, than in tangible assets, like machinery, buildings, and computers. For all sorts of businesses, from tech firms and pharma companies to coffee shops and gyms, the ability to deploy assets that one can neither see nor touch is increasingly the main source of long-term success.
But this is not just a familiar story of the so-called new economy. Capitalism without Capital shows that the growing importance of intangible assets has also played a role in some of the big economic changes of the last decade. The rise of intangible investment is, Jonathan Haskel and Stian Westlake argue, an underappreciated cause of phenomena from economic inequality to stagnating productivity.
Haskel and Westlake bring together a decade of research on how to measure intangible investment and its impact on national accounts, showing the amount different countries invest in intangibles, how this has changed over time, and the latest thinking on how to assess this. They explore the unusual economic characteristics of intangible investment, and discuss how these features make an intangible-rich economy fundamentally different from one based on tangibles.
Capitalism without Capital concludes by presenting three possible scenarios for what the future of an intangible world might be like, and by outlining how managers, investors, and policymakers can exploit the characteristics of an intangible age to grow their businesses, portfolios, and economies.
Professor Jonathan Haskel is Professor of Economics and Director of the Doctoral Programme at Imperial College Business School, Imperial College London, having previously taught at Queen Mary, University of London, Dartmouth College and New York University. He has a number of publications in academic Economics journals on productivity, growth and the intangible/knowledge economy. He is a member of the Conference on Research in Income and Wealth (CRIW) and a research associate of the Centre for Economic Policy Research, the Centre for Economic Performance, LSE, and the IZA, Bonn. He is a member of the Financial Conduct Authority Competition Decisions Committee and a Non-Executive Director of the UK Statistics Authority. Between 2001-2010 was a Member of the Competition and Markets Authority, on market inquiries into Mobile Phones, Home Credit and Airports. He has been on the editorial boards of Economica, Journal of Industrial Economics and Economic Policy and was on the Council of the Royal Economic Society and the "Research, Innovation, and Science Policy Experts" group advising the European Commissioner for Research and Innovation.
Stian Westlake is a senior fellow at Nesta, the UK’s national foundation for innovation.
Stian joined Nesta in 2009. Before Nesta, he worked in social investment at The Young Foundation, as a consultant at McKinsey&Company in Silicon Valley and London (where his work focused on healthcare, private equity and infrastructure), and as a policy adviser in HM Treasury. He also founded Healthy Incentives, a healthcare social enterprise. Stian was educated at the University of Oxford, Harvard University and London Business School. He can be found on Twitter at @StianWestlake.