In a 2014 book, the Nobel laureate economist Joseph E Stiglitz and Bruce C Greenwald argued that the most important societal endowment is the ability to learn. Today, it is increasingly evident that the “learning society” has not only been created, but is starting to drive our economies.

From the nineteenth century until about 25 years ago, businesses largely invested in physical infrastructure and machinery, from railroads to vehicles. But in the past quarter-century, investment in so-called intangible assets — such as intellectual property, research, software and managerial and organisational skills — has soared. Recent McKinsey Global Institute (MGI) research found that, by 2019, intangibles accounted for 40 per cent of all investment in the United States and ten European economies, up 29 per cent from 1995. And intangibles investment appears to have surged again in 2020 as digitalisation accelerated in response to the Covid-19 pandemic.

We believe that this trend strongly hints at the emergence of a new model of capitalism, in which companies’ success will be measured more by their people and their capabilities than by their machines, products or services.

Moreover, we think there is no going back. Firms such as Amazon, Apple, Facebook, and Microsoft are clearly scaling up dramatically and achieving hypergrowth.

Intangibles may well be driving this phenomenon. After all, there is certainly a correlation between investment in intangibles and higher productivity and growth. MGI’s research found that companies in the top quartile for growth invest 2.6 times more in intangible assets than the bottom 50 per cent of firms.

Similarly, economic sectors that have invested more than 12 per cent of their gross value added (GVA) in intangible assets grew 28 per cent faster than other sectors. Economies in which intangible investment is increasing are also posting growth in total-factor productivity. Notably, the only companies that were able to maintain 2019 rates of growth after the pandemic hit in early 2020 were those that had invested significantly in the full range of intangibles: innovation, data and analytics and human and brand capital.

In a dematerialised, digitised, knowledge-driven world, corporate returns, productivity, and economic growth will increasingly be tied to such assets. But unlocking their true value requires not only investing in them, but also developing the skills and managerial know-how, or human capital, needed to make effective use of them. An MGI survey of more than 860 executives indicates that the major difference between fast-growing and slow-growing firms is that the former not only invest more in intangibles and appreciate their importance for boosting competitive advantage, but also focus on deploying them effectively.

The growing salience of intangibles thus makes the imperative of raising skills and capabilities even more acute. This emerging new form of capitalism is potentially marvellous for qualified people with highly portable skills, but somewhat scarier for the less skilled and less digitally savvy. Companies that lack the resources to make necessary investments in intangibles also could fall further behind.

The dematerialised economy, if not managed well, thus risks being a recipe for inequality. Previous MGI research found that a key distinguishing feature of “superstar” companies is their investment in intangibles, including large-scale spending to raise the skills and capabilities of their people.