Individual talent and initiative was recognized as an intangible quality of persons in economics back to at least Adam Smith. He distinguished it (as "enterprise") from labour which can be coerced and is usually seen as strictly imitative (learned or transmitted, via such means as apprenticeship).
Marxist economics refers instead to "an individual'ssocial capital—individuals are sources neither of creativity and innovation, nor management skill. A problem with that analysis is that it simply cannot explain the substitution problem and lack of demand that occurs when, for instance, an understudy takes on a leading role, or a second author takes over writing a popular book series. At the very least there must be some conditional, if not firm-specific then "class specific", special ability to command premiums for outstanding personal performance.
Versus "human", "firm-specific", "individual social"
While conflated in many analyses with human capital, the latter term includes social capital (human relationships) and instructional capital (abstract texts and training materials and so on) that are not tied to any one person, do not die with them or leave employment with them, and therefore cannot be equated with talent alone.[citation needed] In intangibles measurement, value creation and value reporting metrics require all assets with such different characteristics to be categorized as different capital assets, so the more exact reference to the individual person is preferred.
Fusions of terminology are common. Sociological analysts refer to "individual-level elements of social capital" or "an individual's social capital" or just "individual social capital" while economic analysts often use the phrase firm-specific human capital. In either case the clearly includes individual capital but also some "activity-", "community-" or "firm-specific" social capital (community trust) and instructional capital (shareable knowledge or skills). This is easy to measure: its yield is your salary in your current job.
To the degree this is consistent if you take other work nearby, this opens the questions of what is not "firm-specific" and whether a nation is just a bigger "firm": Some analyses see political capital, or just "influence" or "trust of professionals" as a full style of capital of its own. Some ethicists, most clearly Jane Jacobs, see this as simple corruption. Nonetheless, corruption clearly has a cash value, involves some creativity to arrange, and is a decision factor. It is a skill like any other.
Versus "intellectual capital"
Perhaps because of this, not all theorists recognize individual capital as being as essential as labour, or distinct from social or political influence, or from instructional capacity. These theorists often refer to "intellectual capital", which more properly describes a debate or locus of complexity that arises when individuals take key instructional roles. Some refer to celebrity as another fusion, when individuals take key social roles.
However, a great many celebrities are clearly not "intellectual" achievers nor notable for any cognitive or analytic powers, e.g. Kim Kardashian, professional sports figures or other athletes. While they may through sheer exposure become involved in causes or controversies (as Paris Hilton did in the US presidential election, 2008) it's clearly not correct to label all individually unique talent or economic value as being an "intellectual" asset.
This failure to distinguish individual's objectively observed economic value (the power to promote or publicize products, draw attention to causes, etc.) from the "intellectual" powers is probably an elitist bias. Clearly, there are some individuals, including non-humans such as a racehorse, which have economic value unique to their individual body and being that cannot be captured or defined as an "intellectual" asset nor as a set of "social" relationships (because horses do not socialize in the sense humans do). Where slavery exists or has existed, there is clearly a value put on living bodies separate from their instructional or social selves.
Thus for analyzing historical or criminal economic activities, or even professional sports, the instructional capital vs. individual capital vs. social capital distinction is essential.
Investment
Those who differentiate individual capital tend to see it as something that one can invest in, directly, and see growth, directly. For individual skill, even skill at a highly imitative enterprise, like sports or mastery of a musical instrument, this is very often quite measurable. Many enterprises, for instance, a music conservatory or circus school or creative writing coach, are clearly making a living on the identification and (somewhat) measurable enhancement of the individual.
In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the relationship called the production function. There are four basic resources or factors of production: land, labour, capital and entrepreneur. The factors are also frequently labeled "producer goods or services" to distinguish them from the goods or services purchased by consumers, which are frequently labeled "consumer goods".
Neoclassical economics is an approach to economics in which the production, consumption, and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good or service is determined through a hypothetical maximization of utility by income-constrained individuals and of profits by firms facing production costs and employing available information and factors of production. This approach has often been justified by appealing to rational choice theory, a theory that has come under considerable question in recent years.
Human capital is a concept used by social scientists to designate personal attributes considered useful in the production process. It encompasses employee knowledge, skills, know-how, good health, and education. Human capital has a substantial impact on individual earnings. Research indicates that human capital investments have high economic returns throughout childhood and young adulthood.
Intellectual capital is the result of mental processes that form a set of intangible objects that can be used in economic activity and bring income to its owner (organization), covering the competencies of its people, the value relating to its relationships, and everything that is left when the employees go home, of which intellectual property (IP) is but one component. It is the sum of everything everybody in a company knows that gives it a competitive edge. The term is used in academia in an attempt to account for the value of intangible assets not listed explicitly on a company's balance sheets. On a national level, intellectual capital refers to national intangible capital (NIC).
Liane Gabora is a professor of psychology at the University of British Columbia - Okanagan. She is known for her theory of the "Origin of the modern mind through conceptual closure," which built on her earlier work on "Autocatalytic closure in a cognitive system: A tentative scenario for the origin of culture."
Productivism or growthism is the belief that measurable productivity and growth are the purpose of human organization, and that "more production is necessarily good". Critiques of productivism center primarily on the limits to growth posed by a finite planet and extend into discussions of human procreation, the work ethic, and even alternative energy production.
In economics, capital goods or capital are "those durable produced goods that are in turn used as productive inputs for further production" of goods and services. At the macroeconomic level, "the nation's capital stock includes buildings, equipment, software, and inventories during a given year."
Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word weal, which is from an Indo-European word stem. The modern concept of wealth is of significance in all areas of economics, and clearly so for growth economics and development economics, yet the meaning of wealth is context-dependent. An individual possessing a substantial net worth is known as wealthy. Net worth is defined as the current value of one's assets less liabilities.
In finance, valuation is the process of determining the value of an asset. Valuation is a subjective exercise as the process of valuation itself can also affect the value of the asset in question. Generally, there are three ways of performing a valuation, namely discounted cashflow valuation, relative valuation, and contingent claim valuation. In a business context, it is often the hypothetical price that a third party would pay for a given asset. Valuations can be done on assets or on liabilities. Valuations are needed for many reasons such as investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability.
Productive and unproductive labour are concepts that were used in classical political economy mainly in the 18th and 19th centuries, which survive today to some extent in modern management discussions, economic sociology and Marxist or Marxian economic analysis. The concepts strongly influenced the construction of national accounts in the Soviet Union and other Soviet-type societies.
New Institutional Economics (NIE) is an economic perspective that attempts to extend economics by focusing on the institutions that underlie economic activity and with analysis beyond earlier institutional economics and neoclassical economics. Unlike neoclassical economics, it also considers the role of culture and classical political economy in economic development.
Value network analysis (VNA) is a methodology for understanding, using, visualizing, optimizing internal and external value networks and complex economic ecosystems. The methods include visualizing sets of relationships from a dynamic whole systems perspective. Robust network analysis approaches are used for understanding value conversion of financial and non-financial assets, such as intellectual capital, into other forms of value.
For the application of engineering economics in the practice of civil engineering see Engineering economics.
Resource refers to all the materials available in our environment which are technologically accessible, economically feasible and culturally sustainable and help us to satisfy our needs and wants. Resources can broadly be classified upon their availability — they are classified into renewable and non-renewable resources. They can also be classified as actual and potential on the basis of the level of development and use, on the basis of origin they can be classified as biotic and abiotic, and on the basis of their distribution, as ubiquitous and localised. An item becomes a resource with time and developing technology. The benefits of resource utilization may include increased wealth, proper functioning of a system, or enhanced well-being. From a human perspective, a natural resource is anything obtained from the environment to satisfy human needs and wants. From a broader biological or ecological perspective, a resource satisfies the needs of a living organism.
Intangible asset finance, also known as "IP finance", is the branch of finance that uses intangible assets such as intellectual property and reputation to gain access to credit. Like other areas of finance, intangible asset finance is concerned with the interdependence of value, risk, and time.
In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything that can be used to produce positive economic value. Assets represent value of ownership that can be converted into cash . The balance sheet of a firm records the monetary value of the assets owned by that firm. It covers money and other valuables belonging to an individual or to a business.
Organizational capital is the value to an enterprise which is derived from organization philosophy and systems which leverage the organization's capability in delivering goods or services.
Social ownership is the appropriation of the surplus product, produced by the means of production, or the wealth that comes from it, to society as a whole. It is the defining characteristic of a socialist economic system. It can take the form of community ownership, state ownership, common ownership, employee ownership, cooperative ownership, and citizen ownership of equity. Traditionally, social ownership implied that capital and factor markets would cease to exist under the assumption that market exchanges within the production process would be made redundant if capital goods were owned and integrated by a single entity or network of entities representing society; but the articulation of models of market socialism where factor markets are utilized for allocating capital goods between socially owned enterprises broadened the definition to include autonomous entities within a market economy. Social ownership of the means of production is the common defining characteristic of all the various forms of socialism.
A creative economy is based on people's use of their creative imagination to increase an idea's value. John Howkins developed the concept in 2001 to describe economic systems where value is based on novel imaginative qualities rather than the traditional resources of land, labour and capital.: Compared to creative industries, which are limited to specific sectors, the term is used to describe creativity throughout a whole economy.
The Indigo Era is a concept publicized by businessman Mikhail Fridman, describing what he views as an emerging new era of economies and economics based on ideas, innovation, and creativity, replacing those based on the possession of natural resources. Fridman is the co-founder of LetterOne, an international investment business, and first publicized the idea in early 2016. The word "indigo" was initially chosen based on the term indigo children, which has been used to describe people with unusual and innovative abilities.
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