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  • Why did companies continue to undervalue people?

  • The world is a wash in capital, nearly thirty trillion dollars has been dumped into the global market

  • by central bankers all around the world since 2008.

  • Yet while there's plenty of cash out there in the financial system,

  • the real economic recovery is still pretty lackluster,

  • and that's in part due to lack of top-tier human capital.

  • As any first year MBA student knows,

  • executives are supposed to treat property capital as an asset

  • and labour as a cost on balance sheet

  • But in order for the economy to grow,

  • education and skills have to keep pace with technology

  • or productivity suffers, which exactly what we are seeing today in rich countries,

  • they're having lower productivity and slower growth.

  • The human resources company Manpower actually reported recently

  • that 40% of global companies have a talent shortage,

  • and the part of the problem is that companies aren't investing in their talent pool as they might.

  • Workers and the knowledge that workers hold

  • is too often treated as dispensable,

  • so nurturing human capital and then harvesting its riches

  • in the form of intellectual property is really the hallmark

  • of today's most successful businesses.

  • It's no longer the most capital intensive companies,

  • but those like Apple or Google, with the most IP

  • that take the greatest profit share.

  • McKinsey research shows that 10% of corporations take 80% of all the profits.

  • So why them?

  • Because they have higher levels of

  • digital information flows, patents and R&D spending.

  • Knowledge, not cash, is the new capital.

Why did companies continue to undervalue people?

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B1 US capital knowledge productivity talent cash human

Knowledge is the New Capital: why companies keep making one simple and costly mistake

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    jenny posted on 2017/07/04
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