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Unlocking growth through intangible assets: A guide for people leaders

Strategic investment in intangible assets can drive growth and productivity. Read on for key takeaways and actionable insights for HR and people leaders.

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Insights from Ellen Raim, Founder of People MatterWe focus more on solving than preventing People problems.

In the ever-evolving business landscape, intangible assets like intellectual property, research, technology and human capital are becoming increasingly crucial. A recent study by McKinsey & Company highlights the importance of intangible assets in driving growth and productivity, especially in the post-pandemic recovery phase.

Below, we’ve summarized the McKinsey study and included actionable insights for HR and people leaders.

Investing in intangible assets is the key to top growth.

The McKinsey study reveals that companies in the top quartile for growth invest 2.6 times more in intangibles than their slower-growing counterparts. Over the past 25 years, the investment share of intangibles has increased by 29 percent, contributing to a 63 percent growth in gross value added (GVA) in the U.S. and ten European economies.

  • Top-growth companies invest 2.6 times more in intangible assets.
  • The investment share of intangibles has increased by 29 percent over the past 25 years.
  • This investment has contributed to a 63 percent growth in GVA.

Here’s how people leaders can support growth through investments in intangible assets:

  • Advocate for increased investment in intangible assets like training and development, technology and intellectual property.
  • Develop a strategy to measure the impact of these investments on company growth.
  • Highlight the correlation between intangible investment and growth when seeking buy-in from CFOs and other stakeholders.

Learn how to position people as assets to CFOs and other stakeholders

Sectors with higher intangible asset investments see higher growth.

McKinsey also found a correlation between intangible investment and sector growth. Sectors that heavily invested in intangibles achieved higher GVA growth, with knowledge-intensive and innovation-driven services leading the way.

  • There is a correlation between intangible investment and sector growth.
  • Knowledge-intensive and innovation-driven services have achieved above-average GVA growth through heavy investment in intangibles.

Here’s how people leaders can support sector-specific growth through investments in intangible assets:

  • Identify the intangible assets most relevant to your sector, and prioritize investment in these areas.
  • Use sector-specific data to demonstrate the potential for growth through intangible investment.
  • Implement training programs that enhance knowledge-intensive and innovation-driven skills.

Intangible assets support post-pandemic recovery.

As companies and economies bounce back from the COVID-19 crisis, intangible assets could play a meaningful role. If more companies captured the productivity- and growth-driving power of intangibles, these assets could significantly increase GVA.

  • Intangible assets could play a major role in post-pandemic recovery.
  • Increased investment in intangibles could lead to a significant increase in GVA across sectors.

Here’s how people leaders can support post-pandemic recovery through investments in intangible assets:

  • Leverage the post-pandemic recovery phase to advocate for increased investment in intangibles.
  • Implement training programs focusing on developing skills for the digital, dematerialized economy.
  • Use the potential for significant GVA growth as a selling point for increased investment in intangibles.

Inclusivity, learning and engagement all support corporate growth.

In addition to the primary findings on the role of intangible assets in driving growth, the McKinsey report also sheds light on several critical aspects related to people development, employee engagement and DEI. These elements, often considered part of a company's human and relational capital, have been identified as significant contributors to the success of top-growing companies. Here are some noteworthy findings and their implications for HR and people leaders:

  • Top growers are 1.7 times more likely to implement talent-management processes that foster diversity, indicating a recognition of the value of inclusivity in driving growth. (Download our DEI calendar here.)
  • Companies that invest across all categories of intangibles, including human and relational capital, are less likely to be disrupted, more innovative and more likely to attract and retain top talent.
  • Top growers are 2.6 times more likely to strive to retain talent by offering a unique value proposition, highlighting the importance of employee engagement and satisfaction.
  • The shift towards the intangible, digitized economy has increased the imperative to reskill within companies, emphasizing the importance of continuous learning and development.
  • Top growers are twice as likely to define performance measures for all parts of the organization, suggesting a focus on comprehensive employee development and engagement.

Download our DEI holiday calendar to help plan out your diversity initiatives

Here’s how people leaders can support human and relational capital to drive corporate growth:

  • Implement talent management processes that promote diversity and inclusivity within the organization.
  • Develop a unique value proposition to attract and retain top talent, focusing on career development opportunities, a positive work culture and competitive compensation and benefits.
  • Prioritize reskilling and upskilling initiatives to equip employees with the skills needed in the digitized economy.
  • Establish clear performance measures for all parts of the organization to drive employee engagement and performance.
  • Invest in intangible assets, like training and development, to enhance employee engagement and drive company growth.

Measure employee engagement as a KPI

Investing in intangible assets is investing in growth.

In the knowledge economy, intangible assets, including intellectual property, research, technology and human capital, are essential drivers of growth and productivity. HR and people leaders must advocate for increased investment in intangible assets and implement strategies to maximize their impact.


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