We don t want to invest in hard assets. They are too short-lived and risky. We certainly don t want to invest in bureaucracies. We want to invest in people who have a clear, viable concept, who can manage outside contracts with the best sources in the world, and who can concentrate their internal energies on that small core of activities which creates the real uniqueness and value-added for the company. That s where the action is today, but it s a tough sell against traditional thinking.
Physical assets are still important in the wealth creation process.
However, that the balance is shifting in favour of intangible assets can be illustrated by the following scenario. In most industries, it is now possible to buy on the international marketplace machinery and equipment which is comparable to that in place in the leading global firms. Access to machinery and equipment is not the differentiating factor. Ability to use it effectively is. A company that lost all of its equipment but kept the skills and know-how of its work force could be back in business relatively quickly.