October 22, 2015
Posted by: Peter Marcum
Although largely uncounted, intangible digital assets may hold an important key to understanding competition and growth in the Digital era.
Digital capital is quickly becoming the economic engine of the 21st century. So ask yourself: How much digital capital are we creating?
Your Digital Assets Are Supposed to Create Value
The accumulating global value of digital-capital investments has reached more than $6 trillion, about 8.5 percent of nominal world GDP. Globally, levels of intangible digital investment are more than half those of tangible digital investment. In more highly digitized economies, such as Israel, Japan, Sweden, the United Kingdom, and the United States, spending on intangibles represents two-thirds of digital capital’s total value. That is a global representation of the spending on digital assets, of which most are intangible. Now you might ask, “What does this have to do with me? I am a local business and I don’t have a lot of capital.” Consider the following.
Most companies have a website, and that is the problem. Ask yourself—what value does your website create for the user? That answer should lead you on a journey to discover what digital capital is all about. The goal of your website should be to create value for the viewers. The same question of value creation should be asked about all your relations—including employees, suppliers, customers, community, etc. Do you provide digital assets that create value for them?
You may be wondering how a company converts digital capital into economic capital for itself. The answer is known as the "because effect." The "because effect" is what happens when you make more money because of something than with something. Gradually it’s going to dawn on people that not everything needs a business model or an accounting line. And eventually business owners will begin to realize that far more money is made because of why you do things and how you do them, rather than simply what you do or sell. The why and how are the intangibles, while what you do and sell are the tangibles.
Consider the following:
Your digital assets should address the related because effects so those related intangibles are creating the value vs. the tangible things you sell. To measure the value of your digital assets you must simply measure the effect they create. If they are not creating the right effect it is likely due to an intangible that you are not considering. This could likely be the main factor that has more effect on your audience than the product, or even your company’s message.
Believe me, we've created over 800 digital products for hundreds of companies. The ones that do the best are those that serve the users intent "because of the effects" on the user, and subsequently on the suppliers business. It’s because the digital asset enabled the user to do something, get something, learn something or buy something of value. Get it? No, because the effects of your digital assets aren’t leveraging the intangibles. Read this all over again and call me.