In a recent web-conference hosted by Ms.Mary Adams of IC Knowledge Center, Mr.Ken Jarboe, President, Athena Alliance, gave a presentation – ‘Intangible Assets as Sources of Increased Productivity and Enterprise Value‘ – A Personal Summary of the Conference – “New Building Blocks for Jobs and Economic Growth – May 16th-17th 2011 – sponsored by OECD, Athena Alliance, Kauffman, The Conference Board, McDonough School of Business of Georgetown University and the National Academics’. This paper is in response to the Background paper for the conference session – “Emerging Measures for Strategic Management” and “Global Competition and Collaboration” To download the paper please check below.
Points of Interest:
1. Scrap IAS 38: I am a strong advocate of scrapping IAS 38 Intangible Assets, because of its vulnerability, as I describe in the report “Intangible Asset is an oxymoron, permanence seeking space among impermanent.” You will see in the report reference to an estimated $4.1 trillion ‘Investment in Intangibles’ i.e. in Intangible Assets that stand unaccounted.
2. AAA to AA+: Subsequent reaction from Corporate and the Governments alike, an impression we get is that S&P downgrading of US from Triple A rating on August 5 seems to be fully justified. Is it because, ‘hi! lucky they stopped at AA+, so far so good syndrome?
This is after what Inside Job of Charles Ferguson had to note: “Frank Partnoy: I’ve now testified before both houses of Congress on the credit rating agency issue. And both times, they trot out very prominent First Amendment lawyers, and argue that when we say something is rated AAA, that is merely our opinion; you shouldn’t rely on it. Deven Sharma: S&P’s ratings express our opinion. Stephen Joynt: Our ratings are, uh, are our opinions. But they’re opinions. Raymond Mcdaniel: Opinions, and those are, they are just opinions” Unquote
3. Information hoarding:The Conference paper touches upon the subject Information Economy vis-a-vis information hoarding.
4. Establish connection: Do you see a pattern between $4.1 trillion Investments and downgrading of US vis-a-vis Information Economy? Or is it Economy of Information?
5. Intangible framework: Ken Jarboe mentions in his presentation, “Intangible framework is “too important to be left in the hands of macroeconomists.” But what is Intangible?
6. ‘Normalcy Bias’: What if more than a billion people go hungry in the world every day? But what opportunity exists for the Corporate if investment in Agri is set at $5 trillion in the next 5 years to double the Agri produce worldwide? What does Corporate need to wake up? More sleeping pills or an energy booster? What does Society want – Charity or Work?
7. Ask not: Ask not what you can do for your country, but ask what you can do for yourself. Is your rating AA+ or AAA? Do you guess or can you calculate? Or you are not part of the Country Rating? What are the jobs and economic growth that you see for every add-on point for your company, going higher from the current status to AAA? Do you have a DIY kit with you?
8. Ab-normalcy bias: Does iPhone and Mobiles put you in a comfort zone of technology revolution? Between Windows 95, [Rogue Trader Nick Leeson in 1995] and Cloud Computing, [Rogue UBS Trader Kweku Adoboli Charged With Fraud of $2 billion today i.e. 17th September 2011], ask whether the technology that is good enough for entertainment is good enough for controls? Where does CSR fit into Corporate World?
9. Productivity based World Reserve Currency: Can US, given a challenge, demonstrate every other nation to retain its supremacy of dollar? Then link World Reserve Currency to Country Rating of Productivity. But how?
10. Do you want to jump out of GAAP? Many want to. But how? Do you know you are doing the right thing, by dumping the Balance Sheet?
BUILD VALUE CAPITAL: WHAT IS YOUR VALUE CAPITAL?
Statement of purpose of this Paper How Intangible stimulates Economic Growth and annihilates unemployment?
Understanding Intangible
Measuring Intangible
Defining Intangible Value Capital, Intellectual Value Capital and Emotional Value Capital vis`-a-vis their relationship.
Integrating disparate frameworks
Application of Intangible Value Capital to the conference paper, “Global Competition and Collaboration”
Download the Research paper from http://bit.ly/qbH2Fs Ask whether you get an answer for the questions above. Intangible will put you in the top bracket of high skills and energy.
Intangible will crunch World Economy data to a single PC but Computer Technology will get to use binary values of Intangible in the best format – check the Research Paper & find how you can participate in the technological revolution.
Jayaraman Rajah Iyer