Athena Alliance is in the vanguard of identifying, understanding, analyzing, and educating on the information, intangibles, and innovation (I3 or I-Cubed) economy. Information, knowledge and other intangibles now drive economic prosperity and wealth creation. The economic rules have changed; public policy has not caught up. Policy makers are grappling with the urgent need to frame policy questions in light of the changing economic situation. Athena Alliance helps close that gap through activities to reshape the debate and craft new solutions.
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Blog: The Intangible Economy
In order to facilitate discussion on our economic future, Athena Alliance hosts weblog on the Intangible Economy. The purpose of this blog is to share insights and information on the I-Cubed (Information, Innovation, Intangibles) Economy. Please join us in discussing the key issues surrounding the transition to this new economy.
Federal Investments in Intangibles: A Look at the President's FY 2014 Budget
The U.S. is becoming an Intangible Economy. The federal government makes major investments in intangible assets. This analysis finds that almost a quarter of the discretionary part of the federal budget is devoted to investments in intangibles. That rises to a third for nondefense discretionary spending. While the overwhelming intangible investments are in education and R&D, many of the more modest investments are of great importance. However, it appears that there is little systematic attention to these assets as assets. As a result, the federal government does not know what intangible assets it has nor does it have in place policies for effectively managing those assets. We need a better system for tracking investment in and then managing our governmental intangible assets.
"Unlocking the Hidden Value of Intangibles"
Crossbow Magazine (UK)
Many bank loans already put liens on companies' intangibles as part of the loan process. But intangibles are sweep up in an "all asset lien." These intangibles are not specifically counted as collateral and banks rarely even know what is included. Thus, companies do not receive the full funding level for which they could otherwise qualify. The article argues that the Bank of England should institute a program to identify the intangible assets that are part of bank collateral. As part of the Funding for Lending Scheme (FLS), the Bank swaps additional capital for bank loan portfolios. As the Bank assesses the adequacy of collateral it receives from participating banks, it is in a perfect position to identify the intangible assets that are part of that collateral. Based on that review, standards for what is acceptable loan collateral could be developed to explicitly count those now hidden assets.
June 19, 2012
"Intangible Capital: An Overview"
Presented at Strategic Report Roundtable of the Washington Economic Development Commission (WEDC). WEDC is charged with the development of an economic and innovation strategy for the State of Washington. The presentation gave an brief overview of the concept of intangible capital as a lead-in to an expert discussion on state-level economic development programs and their evaluation. This expert roundtable was held in conjunction with the development of the State of Washington's report Building a World Class Innovation Ecosystem
May 8, 2012
"From IP to IC: Putting intellectual property in context"
Presented at Manufacturing Innovation 2012, sponsored by the Manufacturing Extension Partnership (MEP) of the U.S. Department of Commerce. This presentation places traditional intellectual property (IP - patent, copyright and trademarks) in the context of the broader concept of intangible capital (IC) and describes a proto-tool that can be used to assess whether an organization's IC is capable of fully utilizing its IP.
January 26, 2012
Athena Alliance Announces New Advisory Committee
The jobs and economic growth crisis remains central in the current U.S. political debates. But new solutions -- geared for the 21st Century Knowledge Economy -- are needed. As Federal Reserve Board Chairman Ben Bernanke noted at a May 2011 Athena Alliance event, the topics of innovation and intangible capital “are central to understanding how we can best promote robust economic growth in the long run.” To help promote job creation and economic growth in the United States, Athena Alliance is announcing the formation of an Advisory Committee to advance its work on intellectual capital and intangible assets and their central role in the economy. Click here for a listing of the Advisory Committee members. Click here for the full press release .
New Building Blocks for Jobs and Economic Growth: Intangible Assets as Sources of Increased Productivity and Enterprise Value -- Conference Observations
Athena Alliance Working Paper #8
On May 16 and 17, 2011, Athena Alliance organized a conference on the role of intangible assets in job creation and economic growth (see posting below). The purpose of the conference was to raise public awareness about the growing importance of intangibles in driving economic growth and job creation and to identify key research and policy areas that can help governments and businesses develop growth strategies that better utilize intangible assets. As with many such gatherings, the conference yielded a richness of conversations and insights that are impossible to completely convey in this working paper which aims to highlight some of those discussions based on Dr. Kenan Jarboe's personal observations. A one-page summary of the paper is also available.
The final report documenting the conference is available at the New Building Blocks Forum or directly at Intangibles Conference Report September 2011
May 18, 2011
Comment on Cragg and Stiglitz: Invest in Intangible Assets
The Economist's Voice
Michael Cragg and Joseph E. Stiglitz, in an article in The Economist's Voice entitled "Should the Government Invest, or Try to Spur Private Investment?", argue that proposals for investment incentives must move beyond "old economy" ideas such as accelerated depreciation of plant and equipment. This response by Kenan Jarboe of Athena Alliance extends that argument by calling for incentives for investment in intangible assets, such as worker training.
May 16 & 17, 2011
EVENT: New Building Blocks for Jobs and Economic Growth
Intangible Assets as Sources of Increased Productivity and Enterprise Value
On May 16 and 17, Athena Alliance held a conference on intangible assets as the new building blocks for jobs and economic growth. Co-organized with the Organization for Economic Co-operation and Development (OECD), the Conference Board, the Kauffman Foundation, the National Academies-STEP Board, and hosted by Georgetown University’s Center for Business and Public Policy, this event drew together a group of global business leaders, policymakers, and researchers to better understand how we can harness investments in innovation, intangible assets, and intellectual capital to generate sustainable growth, high-wage employment, and improved living standards. As a follow on to the conference, a web-based discussion forum was created at www.newbuildingblocks.org. The forum contains conference materials and follow up documents. It also contains links to conference videos and pictures. The New Building Blocks Forum is open to all -- however you must register at the Forum if you wish to post an item.
UPDATE: The final report documenting the conference is available at the New Building Blocks Forum or directly at Intangibles Conference Report September 2011
April 1, 2011
“Rethinking Innovation Policy: Response to RFI on Innovation Policy”
As part of a Congressionally mandated study of US competitiveness, the Commerce Department issued a Request for Comments on the Strategy for American Innovation on February 4, 2011. In this response, Kenan Jarboe of Athena Alliance notes that the President's Strategy for American Innovation and Request for Comments/Request for Information provide an important framework for thinking about U.S. innovation policy. However, both the framework presented in the Strategy and as articulated in the set of questions contained in the RFI are too narrow in their scope. Many of the comments included in this response refashion the questions to broaden the focus. The response urges the Commerce Department to use the study to undertake a broad analysis and rethinking of our innovation policy. The restated questions contained in this response are an attempt to articulate a starting point for that analysis.
“Economic Growth and Competitiveness in the I-Cubed Economy”
Presented to the National Defense Industrial Association's Ground Robotics Quarterly Meeting with an earlier version presented at the Innovation Demands Boldness conference sponsored by Arizona State University's Complex Adaptive Systems Initiative.
July 12, 2010
“Intellectual Capital Management and Entrepreneurial Mentoring and Education”
On March 10, 2010 the Small Business Administration (SBA) published a Request for information (RFI) on the Entrepreneurial Mentoring and Education. In response to a question on other ways of promoting entrepreneurship, Kenan Jarboe of Athena Alliance and Mary Adams of I-Capital Advisors submitted this statement on the role of intellectual/intangible capital (IC) management in helping high-growth start-ups. While large organizations have the resources to undertake IC management, high-growth start-ups do not. Yet, these start-up are in the greatest need for such assistance, as most of their value is intangible. The statement calls on SBA to promoted IC management activities and consider establishing an Intellectual Asset Management Center.
May 26, 2010
“Commercialization of University Research - Using Intangible Asset Financing”
On March 25, 2010 the Office of Science and Technology Policy (OSTP) and the National Economic Council (NEC) publishes a Request for Information (RFI) on the Commercialization of University Research. The RFI includes a question about alternative source of private funding to overcome the "valley of death" problem (i.e. financing gap between research and commercialization). This statement submitted in response to the RFI describes how intangibles-based financing can help overcome this problem. The statement also suggests a few public policy recommendations, based on earlier work such as “Intangible assets in capital markets”, “Intangible Assets: Innovative Financing for Innovation”, Intangible Asset Monetization: The Promise and the Reality and Maximizing Intellectual Property and Intangible Assets: Case Studies in Intangible Asset Finance.
“Intangible Assets in Capital Markets”
As intellectual capital has become a valuable asset class, firms specializing in intangible-based financing are springing up, using them to raise capital for the next round of innovation. But unlike some of the exotic financial vehicles, these new firms are using traditional financial techniques in new ways to help innovative companies. Some of those new mechanisms for intangible-based financing are discussed in a new article by Ian Ellis and Kenan Patrick Jarboe “Intangible assets in capital markets”. Published in the May/June issue of IAM Magazine (subscription required -- free trials available via registration), the material is take from our report Maximizing Intellectual Property and Intangible Assets: Case Studies in Intangible Asset Finance by Ian Ellis.
“Intangible Assets: Innovative Financing for Innovation”
Issues in Science and Technology
As the U.S. economy evolves, intangible asset investments are becoming vital to economic growth and sustainability. But, as the paper outlines, intangible assets can also be the source of financial capital. As industry has invested capital in research and development (R&D) to create new technology and advance other creative activities, a niche market of firms specializing in intangibles-based financing is springing up. Some intangible assets—traditional IP consisting of patents, trademarks, and copyrights—have been used in sale, leasing, equity, equity–debt, debt, and sale–leaseback transactions to finance the next round of innovation. The paper outlines a number of public policy actions that can be taken to foster the use of intangible asset financing. These include streamlining the technology transfer process, developing underwriting standards to cover the use of intangible assets as collateral and making financial statements more transparent with respect to intangible assets.
The paper is a summary of our two reports: Intangible Asset Monetization: The Promise and the Reality and Maximizing Intellectual Property and Intangible Assets: Case Studies in Intangible Asset Finance.
Intellectual Capital and Revitalizing Manufacturing
In December 2009, the White House released a paper outlining their manufacturing policy, A Framework for Revitalizing American Manufacturing. The Framework makes an excellent case that the federal government has a strong role to play in reinvigorating this important sector of the U.S. economy. It outlines the challenges facing manufacturing while describing the opportunities in new product areas. However, the ongoing transformation in manufacturing to a knowledge-intensive activity will require attention to all the inputs to the production process—technology, worker skills, and organizational structures. The Framework recognizes that the nature of the economy has changed and implicitly accepts this basic premise. “Intellectual capital, such as patents from research and development as well as managerial know-how,” the document states, “is a vital component in determining costs, growth rates and the creation of new industries.” But while patents and managerial know-how are important components, a successful manufacturing framework must embrace the full range of intellectual capital and intangible assets. This Policy Brief makes a number of recommendations to directly incorporate intellectual capital into a manufacturing strategy and best position the United States for accelerated job, productivity, and economic growth in the coming years
Maximizing Intellectual Property and Intangible Assets
Athena Alliance Working Paper #7
As innovative companies struggle to raise funds, intellectual property and intangible assets are providing alternative ways of financing innovation. But greater awareness of them as an asset class is needed. This new paper, Maximizing Intellectual Property and Intangible Assets: Case Studies in Intangible Asset Finance by Ian Ellis outlines increasing, but still nascent, means of financing innovation based on intangible assets. As intellectual capital has become a valuable asset class, firms specializing in intangible-based financing are springing up, using them to raise capital for the next round of innovation. The paper details how, unlike some of the exotic financial vehicles, these new firms are using traditional financial techniques in new ways to help innovative companies. Building upon policy recommendations from other Athena Alliance papers, notably Intangible Asset Monetization: the Promise and the Reality, the paper touches on how the Small Business Administration rules on financing intangible assets have changed and what more needs to be done.
May 28, 2009
US Policies for Fostering Intangibles
Presented at the conference Financing economic development
through Intellectual Property assets on the occasion of the launch of the IP Finance Institute at the Politecnico di Torino, Turin, Italy. This presentation outlines the size of the federal government’s investments in intangible assets and outlines a number of policy steps that can be taken to foster the creation and utilization of intangible assets in the US economy. For all of the presentations at the conference, see the IP Finance website.
Frameworks for Measuring Innovation
Athena Alliance Working Paper #6
Innovation is a key driver of economic growth. However, our understanding of innovation, including our measurement ability, is still not adequate. New frameworks are needed. This new paper, Frameworks for Measuring Innovation: Initial Approaches by Susan Rose, Stephanie Shipp, Bhavya Lal and Alexandra Stone of the Science and Technology Policy Institute, presents two frameworks for measurement: of innovation activity by measuring the intangible assets that are created by and fed back into the innovation process; and of innovation investments, especially the broader investments that set the stage for innovation. The paper then provide an illustrative set of data sources for both frameworks. The paper utilizes and builds on the discussion of innovation published in an earlier report by the authors for the Bureau of Economic Analysis (BEA) - Measuring Innovation and Intangibles: A Business Perspective (also available on the Athena Alliance website). The papers provide important guides for future research, especially in the development of future data sources.
For more on BEA's ongoing efforts to better measure investment in various intangible assets see "Toward Better Measurement of Innovation and Intangibles" by Ana Aizcorbe, Carol E. Moylan, and Carol Robbins in the January issue of BEA's Survey of Current Business
March 5, 2009
US Policies for Fostering Intangibles
Presented at the 6th Annual Summit on Monetizing & Maximizing IP, a seminar produced in association with the National Knowledge & Intellectual Property Management Task Force. This presentation outlines the size of the federal government’s investments in intangible assets and outlines a number of policy steps that can be taken to foster the creation and utilization of intangible assets in the US economy.
Update: January 2009
Virtual Worlds report presentations
Dr. Robert Cohen’s recent powerpoint presentation, based upon the report Virtual Worlds and the Transformation of Business and his talk in Second Life as part of the Gronstedt Group's Training for Success series.
Crafting an Obama Innovation Policy
Athena Alliance Working Paper #5
Candidate Obama made it clear that long-term economic growth—not just economic recovery—is a priority. The campaign advanced a well-thought-out list of technology policy recommendations. President-elect Obama now faces an opportunity and a challenge. The opportunity is to broaden his agenda into an innovation policy focused on other drivers of growth—not just science and technology. The challenge is to make the best use of existing and new institutions of government to design and implement that policy without getting in each others’ way. This paper outline short-term actions that would signal a commitment to a broad innovation agenda and longer-range actions which could significantly strengthen the nation’s innovation capacity.
Virtual Worlds and the Transformation of Business
Athena Alliance Working Paper #4
Enhancing the use of Virtual Worlds can transform how businesses operate and could help create high-technology, high-wage jobs to sustain American competitiveness in the global economy for decades to come. This is possible because collaboration in Virtual Worlds is likely to streamline and shorten design and testing of new products, improve training and learning, and provide important new ways to involve consumers in product design, performance, and after-sales support. Virtual Worlds and the Transformation of Business, written by economist Robert B. Cohen, details the current state of Virtual Worlds, examines current use and applications and lays out public policy recommendations to increase their effectiveness and enhance the U.S. economy.
“Future of Capital: Making intangibles tangible”
Interview in Rotman Magazine
The Fall issue of the University of Toronto’s Rotman School of Management magazine is devoted to the Future of Capital, including discussions on intellectual capital/intangible assets. As Rotman Dean Roger Martin states in his introduction, “By the dawn of the 21st Century, a revolutionary change had taken hold in the realm of value creation: physical and financial assets were no longer the key factors of sustainable competitive advantage. Instead, leading companies like Dell, GE and Procter & Gamble depended on the superior human and knowledge assets for their competitive edge.” The issue contains an interview with Dr. Jarboe of Athena Alliance, as well as other thought leaders including Baruch Lev and Nir Kossovsky.
(Note: the link is to a PDF of complete edition of the magazine - the interview with Dr. Jarboe is on pages 84-86.)
“Building a capital market for intangibles”
Intangible Asset Management
Intangible assets represent an untapped source of capital for American companies and an unrecognized opportunity for investors. But creating robust capital markets for intangibles is challenging – a task made even more difficult by recent turmoil in the financial markets. This paper, based on the Athena Alliance report Intangible Asset Monetization: the Promise and the Reality, outlines relevant policies and structures that could unleash the economy from the strictures of the past.
June 23, 2008
US Policies for Fostering Intangibles
Presented at the National Academies' Board on Science, Technology and Economic Policy (STEP) conference on Intangible Assets: Measuring and Enhancing Their Contribution to Corporate Value and Economic Growth (see below).
This presentation outlines the size of the federal government’s investments in intangible assets and outlines a number of policy steps that can be taken to foster the creation and utilization of intangible assets in the US economy.
June 23, 2008
National Academies' Conference: Intangible Assets: Measuring and Enhancing Their Contribution to Corporate Value and Economic Growth
Investment in intangibles, according to a 2006 Federal Reserve Board staff analysis, exceeds all investment in tangible property and, if properly accounted for, would raise US productivity growth by 20 percent for the period 1973-1995. These assets -- computer software, R&D, intellectual property, workforce training, brand equity and organizational capabilities -- now account for three quarters of economic activity. Increasingly, they are a principal driver of the competitiveness of US-based firms, economic growth, and opportunities for American workers. Some intangibles, like intellectual property, are being securitized, auctioned, and traded; a few years ago no one contemplated the existence, let alone the extent, of such "technology markets." Yet despite these developments many intangible assets are not reported and are treated in the national economic accounts as expenses rather than investments. And there is no coordinated national strategy for promoting intangible investments apart, perhaps, from R&D.
This one day conference, hosted by the National Academies' Board on Science, Technology and Economic Policy (STEP), in cooperation with the Committee on National Statistic and sponsored by the Commerce Department's Bureau of Economic Analysis in response to a congressional directive, includes discussions of what are intangibles and how they work, how intangible investments compare and contribute to growth, how intangibles are created and used by firms, and what the government's role should be in supporting markets and promoting investment in intangibles.
Presentation are available online at the STEP website. The workshop summary report is also available -- Intangible Assets: Measuring and Enhancing Their Contribution to Corporate Value and Economic Growth: Summary of a Workshop.
April 16, 2008
Intangible Asset Monetization: the Promise and the Reality
Athena Alliance Working Paper #3
The U.S. economy could be more prosperous, and enterprises strengthened and made more financially sound, by recognizing, valuing and standardizing intangible assets. To create a secure, open, fair, transparent and efficient capital market for intangible assets, active roles by government and independent regulatory authorities are needed. In the industrial age, physical assets were used to finance creation of more physical assets. In the information age, intangible assets – worker skills and know-how, innovative work organizations, business methods, brands and formal intellectual property such as patents and copyrights – should be used to finance creation of more intangible assets, according to this report. But numerous actions, both large and small, are required. There is no magic bullet; no single government or industry action will resolve the issues. Areas needing attention range from patent reform to securities definitions and banking regulations, from perfection and bankruptcy law to accounting rules, and from technology policy to tax policy. The report provides specific recommendations in each.
December 14, 2007
Mission Intangible: A Conference on the Financial Impact of Extra-financial Information
There's more to corporate performance than what can be gleaned from traditional financial reporting. We know that information on intangibles (also know as “extra-financial” information) plays a major part in investment decisions. One study found that non-financial criteria constitute, on average, 35 percent of the equity investor’s portfolio allocation decisions. But, it is not always readily available. Another study reported that over half of the information investors want is not reported on the balance sheet. On December 14, Athena Alliance, the Intangible Assets Finance Society and Milken Institute hosted a conference the Financial Impact of Extra-financial Information. Dr. Cynthia A. Glassman, Undersecretary of Commerce for Economic Affairs, and former Commissioner of the U.S. Securities and Exchange Commission, was the keynote speaker. Her keynote speech is now available online.
For summaries of the conference, see Intangible Asset Finance Society Conference Solidifies Understanding of Emerging Asset Class and IAFS seeks to spread the intangible asset message to the wider business community - Intellectual Asset Management.