Jonathan Haskel and Stian Westlake’s influential book, Capitalism without Capital (2017), examines the critical shift in the modern economy from tangible to intangible assets. Haskel, a Professor of Economics, and Westlake, a senior fellow at Nesta, present compelling evidence that intangible assets—like branding, intellectual property, and creative innovation—are now the key drivers of economic growth and business success.
Most companies undervalue creativity. Why? Because it’s intangible—it doesn’t neatly fit onto balance sheets. Traditional accounting treats buildings, machinery, and inventories as assets, while creative outputs like branding, customer relationships, and unique designs are relegated to the shadows of financial statements (Haskel & Westlake, 2017).
But this misalignment has a cost. In an economy increasingly driven by intangible assets, failing to measure and invest in creativity leaves companies strategically vulnerable. Jonathan Haskel and Stian Westlake’s groundbreaking book, Capitalism without Capital (2017), outlines this clearly: intangible assets such as branding, intellectual property, design, and storytelling are now the primary drivers of business success.
The Intangible Economy Is Here
Haskel and Westlake (2017) identify four key characteristics of intangible assets: Scalable, Sunk, Spillovers, and Synergies—the Four S’s framework. Intangible assets can scale without significant incremental costs; initial investments are often unrecoverable; benefits spill over easily to others, and they create synergies by enhancing value when combined with other intangibles.
Consider brand storytelling. Invest in a compelling narrative once, and it can scale indefinitely. Yet, because accountants struggle to quantify storytelling’s value, businesses treat it as expendable rather than essential.
The Problem: Intangible Creativity, Invisible Value
The invisible nature of intangible assets leads to misinvestment and mismanagement (Haskel & Westlake, 2017). Businesses often chase short-term gains through easily measurable activities, neglecting long-term creative investments essential for sustainable differentiation.
The repercussions are severe. Competitors who harness the power of intangibles—like Apple’s design culture, Nike’s storytelling mastery, or Adobe’s commitment to creative communities—consistently outperform companies fixated purely on traditional tangible investments (Haskel & Westlake, 2017).
The Insight: Making Intangible Value Measurable
The key challenge isn’t the intangible nature itself, but the lack of strategic frameworks to measure and maximise creative investment. Companies that bridge creativity with measurable frameworks consistently outpace their competitors.
For instance, Adobe doesn’t treat creative communities as marketing expenses but as strategic capital (Adobe, 2021). By investing in community building, Adobe generates long-term loyalty and measurable competitive advantages.
Similarly, Nike’s campaigns aren’t merely marketing—they’re strategic investments in brand equity that pay dividends through global recognition, customer loyalty, and premium pricing (Kotler & Keller, 2016).
The Solution: Creative Capital, Measured Strategically
Businesses must adopt new metrics tailored to intangibles. Here’s how to start:
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Asset Mentality: Treat creativity as capital, not cost. Recognise brand equity, storytelling, and creative differentiation as strategic assets (Kotler & Keller, 2016).
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Framework Adoption: Use frameworks like Haskel and Westlake’s Four S’s to quantify intangible benefits (Haskel & Westlake, 2017).
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Strategic Accounting: Develop metrics such as brand equity scores, lifetime customer value, creative campaign ROI, and engagement indices (Kotler & Keller, 2016).
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Cultural Shift: Foster a culture that values creativity as essential capital, strategically integrated into core business planning (Schein, 2010).
Conclusion: The Future Belongs to the Creatively Strategic
Creativity isn’t decoration—it’s strategic differentiation. In today’s intangible-driven economy, the future belongs to brands that not only value creativity but measure, invest, and integrate it strategically.
As Haskel and Westlake (2017) put it: intangible assets aren’t just reshaping capitalism—they define it. Companies ignoring this shift do so at their peril, while those who embrace it, armed with the right frameworks and measurements, will dominate their markets.
Creativity is capital. It’s time your business started accounting for it.
