What do we mean by "intangible assets"

There is a problem with our language. Specifically with the use of the phrase that is the cornerstone of this blog: “intangibles”. It is a word that gets used sometimes without a specific meaning but a general sense that can mean different things in different circumstances and to different people. Take for example this piece from the Wall Street Journal – “Paul Ryan’s Intangible Assets.” According to this analysis, Ryan’s popularity with conservatives and the fact that he is from a swing state are seen as his “tangible” assets. His intangibles are the average-man touch, the sportsman reputation, the Catholic factor and the energy he brings to the campaign.
Not what we normally see as the division between tangible and intangible assets. But one from a political analysis point of view makes perfect sense. Being from a swing state is about as tangible an asset as one can get in the Presidential race. One could, however, easily see all of these characteristics being called intangibles.
The problem with the phrase “intangibles” is that it is, well, intangible. It connotes something that is not quite real. Just like the concept of goodwill (see yesterday’s posting) and design thinking (see earlier posting), the words “intangibles” don’t necessarily completely capture the meaning.
The long standing alternative is “intellectual capital.” But that often gets confused with the narrower term “intellectual property.” The OECD has started using the phrase “knowledge-based capital.” However, as I showed in an earlier posting using Google’s Books Ngram Viewer, the phrase “intangible asset” has a much stronger usage history than either “intellectual capital” or “intellectual property” — although both of those phrases show up earlier. “Knowledge-based capital” is too new to have much of a usage history.
My real concern is that none of these really convey the meaning I think we wish to ascribe to the phrase. Is a customer list “intellectual”? Is reputation “knowledge-based”?
Over the long run, we need to develop a new vocabulary for this new economy. This will take time but will happen. I note that Arnold Toynbee’s lectures on “The Industrial Revolution” which popularized that phrase were in the 1880’s — over a century after the beginning of the Industrial Revolution but still while the process was ongoing. I would also note that words do change over time. For example, factory originally meant a trading post, not a place where goods were produced.
So, let’s work on crafting a new language. In the meantime, I plan on continuing to use the term “intangibles” — even though it may not be perfect.

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