John Kay writes,

The critical resources of today’s company are not its buildings and machines but its competitive advantages – its systems of organisation, its reputation with suppliers and customers, its capacity for innovation. These attributes are not, in any relevant sense, capable of being owned by anyone at all.

In 1998, I wrote,

the economic problem has been shifting from one of allocating physical capital to one of allocating human talent. Yet the institutional mechanisms that are being employed to solve the talent-allocating problem are anachronistic, in that they evolved to solve the problem of allocating physical capital.

I pointed out that Tobin’s q (the ratio of the market value of the firm to the replacement cost of its capital) is no longer meaningful.

this model breaks down when the valuable assets of a firm are intangible. Surely, the cost of Microsoft’s office campus, manufacturing facilities, and equipment is only a fraction of the market value of the company. No one would use “replacement cost” as an approximation of its value. To put this another way, no one would suggest that the high value of “q” for Microsoft is a signal that it should be building factories and buying machinery.

The essay ends with one of my early expressions of scorn for the Internet bubble.