9. Looking Back and Looking Forward

During the lifetime of most senior business leaders in place today, the world has moved from the Industrial into the Post-Industrial age, one where knowledge has become the means of production. As recently as 1980, market values of public companies were still roughly equivalent to book values. During the ensuing 20 years, patent applications soared, and grants by the U.S. patent office tripled after having been flat for the previous 15 years. This, along with business activity that grew many other forms of intellectual capital, created a 75% difference between market and book values for the average public company, reflecting the value of these unrecorded intangible assets (see discussion of accounting limitations ...

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