Intangible assets v. intangible assets

We generally think of intangible assets in discreet categories. Depending on which framework you choose, these include worker skills and know-how, innovative work organizations, business methods, brands, and formal intellectual property, such as patents and copyrights (see my earlier paper Intangible Assets as a Framework for Sustainable Value Creation). Increasing we see descriptions and analysis of asset complementarities and the interactions among intangibles. For example, there are clearly synergies among knowledge creation, human capital (workers skills), and organizational features and capabilities.

However, there are times when the development of different intangible assets can be at odds with one another. The following insight on enforcement of patents from Stephen Miller (What Do Patents Mean? in Issue in Science and Technology) is a case in point:

“Another reason a company may take no action against a likely infringer is that the company already has an existing or potential relationship with the infringing company, often in another sector or sectors of business, as a partner, a customer, or a supplier. If the real or perceived value of that relationship is greater than the estimated value of the invention, which in its early stages is usually quite uncertain, then the patenting company may choose not to go after the infringer. I saw this happen at a time when my company was negotiating a business deal with another company that I was confident had been infringing one of my patents. Our management decided the value of the deal being negotiated was greater than the value of the technology under my patent, so they refused to try to enforce it.”

So, the goal of maintaining relational capital was in conflict with the protection of intellectual property (and ultimately with the R&D investments made to produce that intellectual property). Are there any other examples where intangibles might work at cross-purposes?

By the way, Miller’s article is a straightforward discussion of how patenting works in the real world. If you want to understand How companies really use patenting and (one of my pet peeves) why patents are problematic indictors of innovation, read this article.

December employment growth slows in intangible producing industries

Employment growth slowed in December according to the BLS data released this morning.  Nonfarm payrolls were up by only 199,000 employees, compared to 249,000 in November. By contrast, employment grew by 648,000 in October, 379,000 in September and 483,000 in August.

Both tangible and intangible producing industries grew by lower amount in December but the slowdown was more pronounced in intangible producing industries. Employment in intangible-producing industries grew by just 58,100 – a marked decline from November’s disappointing increase of 97,400. This compares to increases of 187,500 in October, 132,800 in September and 310,800 in August. Employment in tangible-producing industries was up by 140,800 in December, close to the 155,900 increase in November.

The biggest slowdown was in intangible Professional and Business Services, which grew by only 34,400 in December compared to 61,500 in November and 112,800 in October. Arts, Entertainment, and Recreation also saw a sharp decline in employment growth, rising by only 7,000 compared to growth of 10,200 in November. The sector had been growing at an average rate of 54,000 in the 3rd quarter of 2021 and a much higher rate than that earlier in the year.

The bright spot in the tangible producing industries was in Accommodation and Food Services, which grew by 52,600 in December compared to only 31,000 in November. Employment in this industry is very volatile however. For example, it grew by 352,400 in July but only 7,500 in August.

As I have noted in earlier postings, the labor market seems to have settled back into the post-Great Recession, pre-pandemic pattern of relatively equal growth in tangible-producing versus intangible-producing industries – but at a slower rate. The COVID-19 pandemic has done little to disrupt to dramatic shift in the tangible-intangible structural balance that emerged after the Great Recession.

For more on the categories, see my explanation of the methodology in an earlier posting https://intangibleeconomy.wordpress.com/2020/06/11/which-jobs-got-hit-in-the-covid-crash-tangible-versus-intangible/