THE INTANGIBLE ECONOMY
The new digital World, must represent The Intangible Economy integrated with the today Tangible one we must follow the VALUE in his Flow and Conversion from one nature of value, to another nature of value, like in our day-by-day live; our competence through our work-contract is converted in money, and the money sometimes pay our learning, or competence.
Around us partnerships will be transformed in money (the recommendations), and later we convert money in partner-relationships (conference, seminar).
In our Mind we are naturally integrated in the Value Flow Loop between Cognitive & Cash, but not in our work context, because The Economy Flows are declined in money.
Tangible Economy is counting revenues and charges in money and everything is derivate from the money Flow.
Intangible Economy will be acting through more measurement units just call them “value units” like crypto – currency anchored in the Company or country or community Value Production Goals.
The measurement unit must be specific to the Intangible Value Business goal like: improving the competitive advantage for a line of products, or the algorithm related to the car modelling process, or developing a AI based drug simulation program, build an new low consumption engine for the airplane... all these assets have two-sides, one tangible and one intangible related to the knowledge, partnership, and competence necessary to achieve the business goal.
The “ESG” Environment Social Governance objectives will be measured in at least three different “value units “, the conversion exchange rate in-between these “value units “is depending on the company prioritization scale of the strategic goals and their contributions to the Company Market Value.
Probably Governance is the priority if the company goes through turbulent times or social if the company is just exit from a business acquisition.
The company can be in the “rear up before the jump” stage, to increase Intangibles in a new innovative product, and so they produce more Tangibles Assets to use them in the jump forward stage and “cash “the Intangible production.
Private & Public sector will have a great advantage to adopt the Integrated Economy Tangible & Intangible Assets and Value creation process, they will make visible the Intangible Value invested in Humans, and in the citizen services. The investment can be to renew the competencies, to create new scientific domains, new products, new services, help to develop new practices ready to go for the companies, new education theory and practice for learning & training, new health treatments and protocols and all these together today are not filled specifically in the budget in volume and specific value units able to measure the objective achievement and usefulness or quality.
Because is so big the Companies Intangible part of the Total Value Production we follow Peter Drucker opinion:
“you can't manage what you can't measure.”
Measure the value created by the Company Intangible Assets means Managing the Intangible Value, the same way that we manage the financials, products, services in the accounting, through transactions posting, the Intangible Value Transactions we must post them in the Extended Accounting system (see EU EFRAG) and valuing the Intangible Value related to the Tangible Value that will be generated Intangible Value transactions will be organized by Intangible value accounts and used to the non-financial- reporting (see EFRAG EU ).
The unemployment is one of the big concerns in our society and the HUMANS analysis is based on the counting of jobless Humans, the age, education level, social integration, revenue, trying to consider that 20 years old are different of 40 years old in their basic requirements like what they need to augmented their chances to find not only a decent job but the one which liberate their intellectual power, so you must like what you do.
But we don’t dispose of the Intangible Values KPI’s regarding the competence production down to the competence unit, the mix of competence units associated to the new competences for the new technologies or new Human-sciences. The competences are built on “ancestral competence units’ package”. There are no KPI to indicate day- by-day useful of this competence units and their distribution on the different activities.
We neglect the Intangible value Management because we don’t measure their production and their consumption neither their Business Value results.
In the Intangible Economy the competence is a crucial Intangible Value & Asset, so we keep Peter Drucker advise and we need to measure it, to budget it, and follow it up to the Tangible conversion, we do the same for the Tangible Economy.
In the Competence Production Structure like in France, CPF is like on the flowers fields you can make a bouquet but not like a personnel business investment in your financial resilience.
This Competence production and their usage in which activity, gives us the Competence Flow per Company region or country.
In the Intangible Economy we learn to manage the Intangible Resources like the Tangible one’s.
Managing the Intangible Assets & Values means: counting their volume, their utility, their continuum conversion flow down to the financial but also non-financial reporting. This way gives us the clear picture how good is the production-innovation- partnership-social-governance processes driven by Humans under-contract, and understand the impact of the right balance between Human Values & Company once.
The Competence volume measured in specific “value unit” gives us the right numbers to Manage crisis, and plan how we convert the today competences or transfer them in regional competence buffer covering a region so keep them active for deserving others Companies acting in the region or willing to install in the region. But we can plan their conversion to new ones the visibility down to the competence unit and the digital learning with visuals makes short and fast the reconversion cycle.
How many derivative competencies are visible today from the “root competence” and how long will be to obtain these “derivate competencies “, what are the “spectrum of activities “ready to use them and where. Managing the Intangible Asset Competence in the Intangible Economy is like managing the money in the Tangible one.
The State Budget must be structured in money and Tangible Goals but also in Value Units to structure the Intangible Values & Assets production and goals.
We still measure the return of the Public investment in money, revenues, inflation, deficit but not in Intangible Value like lack or excess in each competence “root” necessary for the Value Production, the missing “New Knowledge “created to accomplish the “high-value added Production”.
Partner-relationship trading the Intangible Assets and Values Flows, in a region or country, that mean how much Intangible Value Exchanges & value-contributions in the specific perimeter are validated not just check marked.
The in or out Intangibles Value Flows are the first indicators about the health of an Economy, but we don’t measure them and we don’t plan them because we don’t Manage Intangible Assets & Values Flows.
How the Intangible Economy can Save the Unemployment inconveniences?
Example can be when a company fire employees, today they will have a money payment to live, so the transaction is just tangible economy, what if we transfer the Humans in an territorial entity with the same salary in same limits and organize this like a regional virtual company, pool of competencies that we keep activating by learning, , diversifying with new knowledge and competencies based on regional competitive advantages or future developing plans in Circular Economy, Local Economy all domains. The “competencies regional tank” will be a competitive advantage for the region to attract new activities in these specific domains and will be an explosive “new-activities & initiatives “workplace”.
The competence will be valuable because cross-domains, combined with practices, knowledge -after-action loop, can be fueled in every activity. When the Human with competence is transferred in a new company of course with the same salary (for a period of time) he is ready to produce now and being all-time active he is “warmed” in the activity. The poll competence exit can be full or part-time the total revenue will be the same. Government cost will be the same like different unemployment assistance but much productive the Human doesn’t like social assistance normally.
The model is to switch the Human from a tangible production inside a profit -money based company to an Intangible Production in a regional cluster based on Intangible Assets Production of course both types of Value production are possible.
The Government, the region and the private business have all the interest to keep the HUMAN the only Value producer in the “Competencies Tank” in a continuum process of renewal Intangibles Values; competencies, knowledge, partnerships. Metaphoric, is better to use the car instead to keep it blocked in a garage.
The new paradigm Human-Platform-Structural Intellectual Capital- Local Partnership, the Business Model is generating Intangible Assets & Value, and is The Future Key for the Industry.
Knowledge, Competence, Partnership, Intangible Production of Assets, make the Economic Power of a country, region or just community.
The QUALITY of the Intangible Human Capital and the region Intellectual Structural Capital, is today the equivalent of the Land quality for the farmers, or the Factories in the last centuries.
The “Competencies regional Tank” with local Partner-relationships, generate Intangible Assets belonging to the Region Intangible Capital Assets, so the Region investment is not anymore depending if the Company will stay or leave, hire or fire Humans locally positioned with families and Houses.
More quality has the “Competencies regional Tank” more resilient is the region and healthier the Humans living there.
Many collaterals like: education, health, social assistance, communications, roads, shops, spare-times activities, are furnishing a strong Intangible partnership Value very precious, that will change the picture in the business world of the just profit Value, the money, and each morning fear to be part of the hunt of the prey with little cash.
In many cases the prey has Intangible Assets but the Intangible Assets are not in the Accounting system in the today accounting balance, so loosing this Intangible Assets & Values, when you are just fired, this will not hurt the short term financial Balance of the acquisition specially today, you play what you wish with the Intangible Assets without clear Accounting rules.
Stock Exchange is not an Accounting system for Intangibles.
How many financial analyses are taking care to measure and define the Intangible Assets in the financial accounting in a Merger & Acquisition process? Rhetoric question.
Government Business is Citizen wealth, health, education before others but then Intangible Economy must be at least the same value like the Tangible one, the state budget must be defined by Intangible KPI also deducted from the Integrated intangible & tangible Accounting.
The Intangible Value of the country or regions the “Intangible Tanks of Competencies & Knowledge & Partnerships” must be transferred to the local companies like exchange to Human related Intangible Values like: revenue stability, Business resilience, sustainability obligation for period of time, values contributions to the community like education, research.
The Local Knowledge & Competence Reservoir of Intangible Assets & Human Capital will “trade Intangible Values in the Partner-relationship with the acting Companies.
In the virtual work era, the mobility and flexibility are key. Human is delivering work sometimes on many different contracts in a virtual connection with the work object, so the Home is around each of us, and the object of our work is elsewhere, the Company is a virtual one localized in cloud and fixed by a social headquarter, very easy to change.
The future we wish to build is on the place where we are living so we wish to fix it in a place able to propose us the best guaranties regarding our live Quality like: revenues stability, education level, health level, activity resilience even if the activities are different, the right partnerships with the others community members.
We understand that the “world-wide planet happiness “is broken until we share the same life values and so build trust.
The Multi-national Companies will act like “federation of communities” and must build models, how we exchange values, decisions, data, example (US Data-shield vs. RGPD EU), communist derivate system vs. capitalistic, (Huawei, Tik-Tok,), human-rights and property respect, freedom of expression, and much more civilian rights (HONG-KONG).
The Multi-national Companies must change the model of producing, interacting with the employees, organizational charts will be complete modified.
The revolution in the evolution will be agenda-first-point in the Companies Governance in the next decades and Intangible Economy the challenge.
The Intangible Economy is the most exciting challenge for the next decades and centuries, Human will discover many facets of his work and value creation process.