Late ad­di­tion Ad­vice for an age-gap baby

The Jewish Chronicle - - LIFE -

is a news­pa­per that is part tan­gi­ble, part in­tan­gi­ble. Some of the com­po­nents that are needed to pro­duce a news­pa­per like the JC— the pa­per, the print­ing presses, the desks and pens and com­put­ers for re­porters and staff — can be touched and felt. Other bits, such as the de­sign and brand­ing and the ideas for ar­ti­cles, can­not.

The econ­o­mist Jonathan Haskel con­tends that the in­tan­gi­ble parts of the econ­omy are be­com­ing mas­sively more sig­nif­i­cant than be­fore. With Stian West­lake, Pro­fes­sor Haskel is co-au­thor of the widely ac­claimed Cap­i­tal­ism with­out Cap­i­tal, a book de­scribed by a chap called Bill Gates as “eye­open­ing”.

In the past, the econ­omy was driven by com­pa­nies pro­duc­ing tan­gi­bles, steel and cars and desks and pa­per, for ex­am­ple. Now, the likes of Google, Mi­crosoft, Ama­zon and Uber drive the global econ­omy. In­tan­gi­ble in­vest­ments don’t func­tion in the same way. Ac­cord­ing to Prof Haskel they have four key char­ac­ter­is­tics —the 4 S’s, he calls them — which to­gether rep­re­sent a fun­da­men­tal shift in how to­day’s econ­omy op­er­ates.

First, in­tan­gi­bles are scal­able. Once you’ve de­vel­oped the soft­ware for Uber driv­ers in San Fran­cisco, the same soft­ware can be used by driv­ers in London and Tel Aviv. Sec­ond, they in­volve sunk costs. If a car man­u­fac­turer goes bust the build­ings can be flogged off. But if a soft­ware com­pany goes un­der even af­ter plough­ing in mas­sive in­vest­ment in prod­uct devel­op­ment, there may be lit­tle left for the ad­min­is­tra­tors to salvage. Third there are spillovers: an in­tan­gi­ble in­vest­ment can ben­e­fit not just the com­pany that re­ceives the money, but other com­pa­nies too — Ap­ple’s iPhone quickly cre­ated a whole smart-phone in­dus­try. And fourth in­tan­gi­bles ex­hibit syn­er­gies— they are more valu­able to­gether; think of the Harry Pot­ter fran­chise, where sto­ries start in books and then are adapted for the­atre and film.

The im­pli­ca­tions of the new econ­omy are many and in­clude grow­ing in­equal­ity— the vic­tors in the in­tan­gi­ble econ­omy win more and they win more quickly. It’s re­mark­able to think that Face­book is only 15 years old. But the shift in the

Jonathan Haskel

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.