Immaterial Value Creation
How is wealth created in societies? For a long time, economists gave the simple answer that capital, labor, and natural resources were the three cornerstones of economic activity. This simplistic perspective was challenged by the management consultant and author Peter Druckner already in the late 1960’s. He observed that leading firms relied on the knowledge that existed amongst its employees and within the organization. The theory of the knowledge-based economy, based on Druckner’s observation, has with time gained strong support in research. The evolution of the knowledge-based society has concurred with a development in which the economy in a greater degree is based on immaterial, rather than physical, value creation. A significant share of the value created in modern industries and service sectors is immaterial in its nature.
Examples of immaterial value creation are new business ideas, inventions, and digital content. Much like patents, design rights and trademarks these values do not take the shape of physical goods. The knowledge economy is characterized by a reliance on Intellectual Property Rights (IPR). The value-added IPR-intensity of the EU business sector is amounting to 51 percent. The highest share of employees in IPR-intensive fields is found in the Czech Republic (47 percent) followed by Slovenia, Slovakia, and Hungary. Economists and public policy experts widely agree that IPR-intensive businesses play a key role in fostering long-term development. Creating a good system for protection of IPR is all about finding a balance, between allowing knowledge to spread and for those who have created intellectual values to benefit from it. Smart policy design is required in order to balance these two needs.
At Sanandaji Consultancy, we are at the forefront of this challenge. Respect for the law does not come by itself, it takes tireless opinion-making to reach tangible results. See our services to find out in detail what services we can offer your business.