Change is in the Wind
Like many other developed economies, the Canadian economy in the past half century has been radically altered, ripped from its quiet Post War complacency by an asset revolution on the scale of the Industrial Revolution. Today intangibles make up nearly 80% of our post-industrial economy, traditional tangible assets only 20%; shockingly a few decades ago these proportions were reversed.
Nowadays, it is not traditional factories and machines of the industrial era that drive our economy but a host of unfamiliar intangibles; new ideas, network applications, software and other forms of creative assets. These new value drivers have galloped into our lives aided by mobile communication devices, the Internet and exponential growth in the performance, speed and RAM power of computers.
No wonder our economies are stalling, we haven’t experienced this scale of change since the invention of the steam engine.
Emerging from the fog of change is an exciting new brand of capitalism.
The good news is the force and power of this revolution could significantly enlarge the economic pie; unfortunately the strangeness of it all has changed the rules of the game significantly, contributing to growing inequality, increased volatility while undermining many of our institutional norms and practices.
Truth is, we’re doing a poor job of managing this change. Bankers, for example, find it very difficult, if not impossible, to finance modern creative business. Why? Businesses today are underpinned by intangibles; assets that banks and other traditional financial institutions simply can’t deal with. But this problem is not confined to finance. Our government officials, our legal and accounting professions are behind the curve on change and as a result we’re suffocating the new economy, denying it the capital and other resources it needs to grow.
We must not let fear of the unknown paralyze our commitment to building a positive future. We owe it to ourselves, and a generation of creative young people ready, willing and able to take on the world.