Why Leaders Are Still So Hesitant to Invest in New Business Models

Harvard Business

Consider the dramatic shift in the types of assets that create market value. According to Ocean Tomo, a consulting firm focused on intellectual capital, physical assets (plant, property, and equipment) made up more than 80% of the market value of the S&P 500 in 1975. Today, the majority of market value is made up of intangible assets (networks, platforms, intellectual property, customer relationships, big data) more than physical assets.

GDP Is a Wildly Flawed Measure for the Digital Age

Harvard Business

It struggles to account for today’s intangible assets—services, insights, and networks. As the market, including customers, employees, and investors, shifts the mix of what is done and what is consumed, this most important and commonly used economic indicator, along with Generally Accepted Accounting Principles (GAAP), tells a concerning story. HBR STAFF. Germany, Switzerland, and Japan are now in negative interest rate territory. So are Denmark and Sweden.

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On Creative Accounting: Two Creativity Myths

Harvard Business Review

As long as the new ideas cohere with ethical standards, and generally accepted accounting principles ( GAAP ), they can yield immense benefits. The Balanced Scorecard's primary form of novelty is that it takes into account the intangible assets that are so crucial for information-age companies. Tags: Creativity Ethics Innovation GAAP "Creative accounting" is really bad. Except when it's good. Say that in a roomful of managers, and you get nervous laughter.

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The U.S. Corporate Tax Code Is Broken. How Should We Fix It?

Harvard Business Review

Second, the rise of intangible assets, like patents and widgets, means that transfer pricing issues become central, and so high tax rates become more untenable as they increase the incentives to be aggressive. And finally, the importance of intangible assets means that we should be particularly focused on the incentives to undertake R&D in the U.S.