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 Druckners observation, has gained strong support in research. The evolution of the knowledge-based society has concurred, with a development in which the economy in greater degree is based on immaterial, rather than physical, value creation. Today, a significant share of the value created in modern industries and service sectors is immaterial in its nature. With immaterial value, we mean for example copyright material, digital content, or data. Sanandaji Consultancy has conducted in-depth research on the extent of immaterial value creation in Europe. In one study we show that, already today, 51 percent of gross value added created in the EU business sector is created in firms with a strong reliance on immaterial values.

Creating a good system for protection of Intellectual Property Rights (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.