McKinsey: Intangibles Drive Economies of Scale and Scope
Thanks to Bertrand Duperrin for pointing here to this piece by McKinsey consultant Michele Zanini who describes “power curve” analysis which depicts the relative strength of market leaders versus the rest of the field. She points out:
Power curves are promoted by intangible assets–talent, networks, brands, and intellectual property–because they can drive increasing returns to scale, generate economies of scope, and help differentiate value propositions.
Zanini also points out that the degree of concentration of power is higher in intangibles-based businesses like software and biotech than in capital-intensive sectors such as chemicals and machinery. Makes you think that intangibles management is an important management skill as the glboal economy runs more and more on knowledge-based intangibles.
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