Capitalism without Capital and after COVID (#37)

Sometimes there are things that are very easy to measure at the big picture, but they get harder to measure the more granular you get — and intangible investment is definitely one of those things

[00:01:30.26] Ben: Stian, thank you so much for coming on the Structural Shifts podcast. We’re really delighted to have you on. I think there are a few structural shifts as profound as the one you’ve been investigating, most notably through your 2018 book, “Capitalism Without Capital”, which is the shift from a tangible to an intangible economy. This is a phenomenon which has been playing out over the last 40 years in developed economies, and which, as we’ll discuss, has likely been accelerated by the pandemic. It’s also a phenomenon, which, although it might seem slightly esoteric, is at the roots of or contributing to some of the biggest changes we’ve seen in society, such as inequality, as well as in business, such as the rise of big tech platforms. So if it’s okay with you, let’s start by just defining what we mean by an intangible economy. So, do you mind just kind of setting the scene and telling us the extent to which investment has shifted from tangible to intangible assets?

Stian: Yeah, of course. If you think about what the economy used to be like 40, 50, 100 years ago, the majority of the stuff that businesses, that governments invested in were stuff you could see and touch — what economists would call tangible capital. So, it was machines, it was factories, it was vehicles, it was buildings — all these kinds of things. One of the things that we’ve been noticing is there has been a really slow but pronounced change over time, such that now the majority of investments that businesses make — buying an investment, I mean, something that you incur a cost upfront, and it delivers you a benefit over time — most of the stuff is stuff that you can’t see or touch, things that you can’t stub your toe on, as it were. It’s things like investing in r&d to create new ideas, new patents, things like investing in marketing, advertising, customer understanding to build brands, it’s things like employer training. And it’s stuff that has this kind of fuzzy idea of things like organizational development. So if you think of a company like Apple, one of Apple’s competitive advantages is its remarkable supply chain. Now, the supply chain includes some things that you can touch — it includes factories — but Apple doesn’t own them. So those are to some extent tangible. The stuff that really creates value for Apple is these privileged relationships, the expectation of doing business, and their access to these suppliers, which allows them for example, to get products to market at volume, fast. These things are investments, they’re costly to acquire, they deliver benefits over time, but they’re very different from the world where your investments were the machines and the factories or the land that you grazed your cattle on.

For most of history, tangible assets represented a much bigger slug of the economy, than the investment in intangible assets. And about 10 to 20 years ago, depending on the country, those two lines crossed.

[00:03:59.18] Ben: The book is full of brilliant graphics but one of the ones that really stands out is the one that shows the acceleration in investment in intangibles and the point at which it crosses over. So intangibles now represent or comprise a larger proportion of overall business assets than tangible assets.

Stian: Yeah, that’s right. So if you think of these as a percent to GDP, so in relation to the size of the economy, for most of history, tangible assets represented a much bigger slug of the economy, than the investment in intangible assets. And about 10 to 20 years ago, depending on the country, those two lines crossed. The intangible line has been moving up and up and up, slowly but steadily for decades. They crossed. If you look in rich countries now, the intangible investment represents roughly 15% of GDP of national annual output, and tangible assets more like 10–11%. One of the nice things about these slow but steady changes is you can be pretty confident that these things are reliable. We have so much data on this. This is a change that’s been going on for a very long time.

[00:05:06.17] Ben: You say we can be confident in the reliability of the data. But, I mean, you used the term ‘fuzzy’ for some of these intangible assets earlier on. And that sort of suggests that there might be things that are quite difficult to define, and therefore quite difficult to value and capture on a balance sheet or in economic statistics, GDP statistics.

Sometimes there are things that are very easy to measure at the big picture, but they get harder to measure the more granular you get — and intangible investment is definitely one of those things in that national accounts do a kind of okay job of representing this.

Stian: So it’s a really good question. And it’s one of these things that have traditionally not been very well captured in either economic statistics — the kind that governments put together — or in business statistics, the kind of thing that your accountants would put together. And one of the interesting parts of this work, my co-author, Jonathan Haskell, along with many other economists, have really spent a lot of the last 20 years trying to work out ways of measuring this intangible investment at the level of the economy. And they used surveys, they’ve used fascinating historical data sets; it took quite a while to get a handle on this stuff but the results are pretty conclusive that this intangible investment is growing. Where things get tricky — you mentioned company accounts — sometimes there are things that are very easy to measure at the big picture, but they get harder to measure the more granular you get — and intangible investment is definitely one of those things in that national accounts do a kind of okay job of representing this. Nowadays, most countries will record their r&d investment and record some of their human capital investments. But corporate accounting standards don’t recognize this stuff. So, you will find very few intangible assets on a balance sheet. And I guess one of the interesting aspects of this is if you look at the job of people who try and value businesses with a lot of intangible assets — such as sell-side investment analysts, people who work for hedge funds or other investment funds; it’s really interesting, there was a whole bunch of research done on what these guys spend their time doing when they’re on CEO calls, CFO calls, and someone managed to code all these conversations. It turns out that most of these things are actually asking about intangible assets, to try and understand the value of whether it’s supply chains, whether it’s the r&d going into the new product line. And there’s a kind of an interesting opportunity here if you’re involved in investment because this stuff is harder to value — and if stuff is harder to value that’s good for the people whose expertise lies in valuation.

The reason why we should care about the change to intangible capital is that from an economic point of view, intangible capital behaves differently. And the four S’s are the four ways in which it acts differently: scalability, sunkenness, spillovers, and synergy.

[00:07:19.18] Ben: It’s true, I never… I suppose I had thought about it, but not like that exactly, which is it’s kind of an arbitrage opportunity there because I suppose superficially, things like return on capital might be understated, or profits might be understated because so much of this stuff should be on the balance sheet, but it is an expense to the p&l. And then, you know, just having a better understanding of the things that are not recorded in annual accounts or in the annual report potentially gives you an edge.

Stian: Yeah. And I guess, you know, if you think about the way things have always worked in, say, on the sell side, when you look at sectors like pharma. So pharma is a sector that has always been heavily based on intangible assets. The value of GSK is kind of the value of its pipeline of drug ideas. And I guess, if you’re an analyst in that sector, what you’ve always done is basically, you’ve done a bunch of valuations of what you know to be the product pipeline with some kind of option value based on what you think the individual capability of the firm is. And I guess in an economy where intangible capital gets more and more important, more of the task of investment analysis is going to look more like the pharma investment analyst or even a kind of an analyst of the VC house.

Intangible assets have a lot of spillovers, and that means that a company that makes them can’t always be sure that it will get most or even any of the benefits of an investment that it makes. […] It’s much harder to control those spillovers than it is with tangible assets, […]. And so, managing those spillovers becomes a really important part of what successfully managing business looks like in an intangible economy.

[00:08:30.22] Ben: Definitely. You talk about the four S’s of intangible assets. Do you mind just running us through it? Because I think it’s really critical that we understand the properties of intangible assets. And since they behave differently, that then, in turn, means that economies behave differently, and so on. Do you mind just telling us about the four S’s?

Stian: Yeah, totally. If you take away only one thing from the book, this is the thing to take away from it. So the reason why we should care about the change to intangible capital is that from an economic point of view, intangible capital behaves differently. And the four S’s are the kind of four ways in which it acts differently. The four S’s are scalability, sunkenness, spillovers, and synergy. So I’ll just quickly give an example of what I mean by each of those. So scalability: if you compare an intangible asset to a tangible asset, a tangible asset, you can only get a certain amount of use before you need to kind of invest in more of those tangible assets. If you own a fleet of taxis, if you want to carry more of a certain number of customers, you need to buy or lease more taxis. If what you own is an algorithm for dispatching private hire cars like Uber, you can scale that if not infinitely, then arbitrary. You can scale that across a very large number of taxis and a very large number of cities. So valuable intangibles go a really long way. And one of the implications that means that we can go on to talk about is that if you’re a big company with some valuable intangibles, you can get very big, you can create a lot of value.

Stian: The second S we talked about — sunkenness. So sunkenness refers to the economists’ idea of sunk costs — the fact that sometimes once you invest in something, you can’t recover the value of it. And that’s very much more true for intangible assets than tangible assets. So if you own, for example, an office building — a tangible asset — and you go out of business, you can very often sell that office building, you can recover quite a lot of the value from it, even if you’re in a distress sale. If you own a patent, you can sell patents but patents are very often worth almost nothing to anyone apart from a small number of providers. A brand of a company that’s gone bust is not worth a lot. As we can maybe come to talk on later, that’s got some really important implications to how you finance businesses that have a lot of intangible assets because debt investors do not like sunk costs.

Stian: The third S is spillovers. The idea of spillover is, intangible assets have a lot of spillovers, and that means that a company that makes them can’t always be sure that it will get most or even any of the benefits of an investment that it makes. So, there are classic examples all through the history of tech, but Xerox PARC — kind of one of the foundational stories of Silicon Valley — they invented almost every foundational computing technology, every desktop computing technology you can think of. They make no money from it. Most of the value was captured either by Apple, by Microsoft, or by a host of other companies. It’s much harder to control those spillovers than it is with tangible assets, where we’ve got a set of very clear rules around them, they’re kind of physical, they’re kind of easier to keep tabs on. And so, managing those spillovers becomes a really important part of what successfully managing business looks like in an intangible economy.

There is a lot of productivity growth, at the moment, it’s just not evenly distributed. So, if you run one of these companies that can benefit from the synergies and the scale of intangibles — i.e. own a bunch of valuable intangibles, you can scale them across a really big business, and you can combine them in ways that make it very difficult to compete with you. 

Stian: And then the fourth S — synergies — is this idea that intangible assets seem to be especially valuable when you combine them in the right way with other intangible assets. So, a classic example we talk about in the book is the EpiPen — the epinephrine injector for stopping allergic reactions and anaphylactic shock. And what we talk about in the book is how that isn’t really a typical pharmaceutical invention. In fact, it’s based on a drug with a patent that expired over 100 years ago. But one of the things that EpiPen’s owners have very effectively done is they’ve combined a whole bunch of intangible assets from the design of the injector, to their very privileged supply chains, to the various legal moats that they put around things to even the brand name — the recognizable brand name — of the product that you kind of want to be able to recognize when describing in an emergency. And together, all of those things, all of which are kind of intangible assets, combine to create a big competitive moat around the product, but ultimately kind of very profitable, very value-created product for them. And these synergies exist, you know, between talent and intangibles, between different intangibles. And again, it means that if you’re a company that has a bunch of these valuable intangibles, you can create a lot of value for shareholders.

[00:12:59.01] Ben: Fantastic. So I think the four S’s give us a really nice framework to dig into some of these other topics, right? So I wanted to move next to growth. You talk about the scalability of intangible assets, right? So if the economy is made up of more intangible assets, and those intangible assets are more scalable, why don’t we see more economic growth or, you know, or higher productivity growth than we do at present?

Stian: So that’s a really good question. It’s something that really ever since we started working at this, we’ve been wrestling with, and it’s a big subject of our follow-up book, which is coming out later this year. But I guess one of the things here is that there is a lot of productivity growth, at the moment, it’s just not evenly distributed. So, if you run one of these companies that can benefit from the synergies and the scale of intangibles — i.e. own a bunch of valuable intangibles, you can scale them across a really big business, and you can combine them in ways that kind of make it very difficult to compete with you. Those businesses, as far as we can see, are very profitable, their profitability is growing, they make a lot of money for their shareholders and their employees, and they’re kind of seen as iconic businesses. So, you know, your classic dominant internet platforms, Google and Facebook, and whoever would be examples of that. But, you know, we see this in other areas as well. So, you know, Domino’s Pizza — a classic example of a business that looks very old fashioned, but has totally killed it in terms of developing a very powerful internet platform. So you have a world where some businesses, because of the intangibles are doing really well. And one thing that we’ve been looking at is the fact that in an economy like that, because of these spillovers, you create kind of perverse incentive for the rest of businesses. If intangibles have quite a high spillover and if some firms are really good at getting the benefit of those spillovers, the rationale for investing, for your kind of laggard businesses, your runners up in industries is plausibly much less.

there’s been a ton of research over the last kind of 20 years now, looking at that gap between your so-called leader firms and laggard firms. And basically, in every country, in every industry, that gap is growing. And really, interestingly, it’s growing the most in the industries that have the greatest number and that have the greatest proportion of intangible assets.

Stian: You know, if you’re in a traditional — if you imagine a very tangible-based economy like an industry like, I don’t know, running a laundromat, let’s suppose the best laundromat has the best washing machines and the best building; if you run the second best and the third-best laundromat, you can catch up in due course. You can borrow money from the bank, you can buy better machines, it’s kind of pretty obvious what you need to do to catch up because you can visit the other businesses and look at what they’re doing. There you would expect to see over time the gap between the most productive, most profitable businesses, and the least, would shrink because you can just copy. Now, if you’re in an intangible economy, those dynamics change. Imagine you want to compete with Uber. Okay, you can try and develop your own dispatching app but the scale effects are such that you’re going to be up against vast fixed costs, it’s very unlikely you’re going to be able to compete with the huge amount of money that Uber can pour into their development. And because of scale, you won’t be able to kind of amortize that across a large business. Okay, so you say, “Okay, well, I’ll come up with some new product feature that Uber hasn’t come up with.” Let’s suppose you’re an absolute product development genius, and you come up with something. In this economy, because of the synergies and because of the spillovers that we talked about, you might not be very well advised to do that, because Uber could quite simply copy it, or, you know, they might buy you, which would be kind of a good story for you but in terms of the dynamic, your business goes away, and therefore the leader business grows more powerful. So, rather than the world of laundromats, where catching up with the leader is about copying, it’s about acquiring probably mass-produced tangible capital, where you can probably get a bank loan for it, in the intangible economy, it’s much harder to catch up like that.

Stian: And I guess this comes back to your original question about what might be going wrong with productivity. If you can imagine an economy where the best businesses are doing really well, they’re generating a lot of money for their shareholders, they’re being really productive but there’s huge disincentive for a large chunk of the economy to invest and to catch up. In aggregate, that could come to an economy where productivity growth is actually pretty slow. And in terms of the evidence for this, there’s been a ton of research over the last kind of 20 years now, looking at that gap between your so-called leader firms and laggard firms. And basically, in every country, in every industry, that gap is growing. And really, interestingly, it’s growing the most in the industries that have the greatest number and that have the greatest proportion of intangible assets.

One of the issues of spillovers is businesses will invest less than is socially optimal in R&D. If you’re in a world where you want more R&D investment, but businesses won’t do it, that probably means you need governments or research institutes to do it. Again, that’s quite a judgment-based process, so you’re sort of saying you’ve got to trust people in positions of authority to do this kind of thing, which is particularly challenging in today’s political circumstance. So that’s a real dilemma.

[00:17:23.07] Ben: Do you think there’s another thing at play as well, which is, in the world of tangible assets, economies of scale were eventually subject to diminishing returns, right? Whereas in the world of intangible assets, you know, where we have network effects, you could argue that a lot of times, you get just increasing returns to scale. You talked about Uber — I guess the more customers you have, the more drivers you can attract, the more drivers the more customers, and you get these virtuous self-fulfilling feedback loops, meaning that you get increasing returns to scale, whereas in the past that almost wasn’t possible in economic terms.

Stian: Yeah, that’s definitely true. And I think those network effects you talk about are a really important part of this kind of scalability of intangible assets.

[00:18:07.18] Ben: Do you think we should be using more antitrusts? So you talked about Facebook and when I think about Facebook, I think, you know, the initial platform was super successful, had very strong network effects, it delivered a lot of utility to its customers. But since then, you know, it’s copied features from other people like Snapchat, it bought Instagram. And I just wonder, you know, should we be using antitrust to stop the big platforms from getting even bigger through copying and m&a, for example?

Stian: Antitrust and competition policy clearly become very important in an era of intangible assets because of this kind of tendency of the best companies to do really well. The flip side is, I think a lot of the old rules become a lot harder to apply. So, traditionally, we’d look at an economy, and also we’d look at an industry and we’d say, if the kind of concentration ratios are above a certain level, then that’s a problem and we need to break up the leader firm or we need to block acquisitions. That becomes a lot harder in this kind of economy, I think, for two reasons. Firstly, because these synergies because there are so many crossovers between different types of assets, it becomes a lot harder to define an industry. So, for example, you know, are Facebook and Google in the same industry? I mean, on one level, they’re clearly not — one is a search engine, one is a social media site. But, you know, if you’re an advertiser, they might look a lot like they’re in the same industry. So it becomes a lot harder to make those distinctions. I think the other thing is that, you know, the kind of silver lining of scalability and spillovers, is that although businesses can thrive and grow and their dominance can get entrenched, the flip side is, when things go wrong, they collapse very quickly and your rivals can grow up very fast. So the kind of optimistic vision of competition in a world of intangibles doesn’t look like a market where there’s kind of, you know, seven or 17 or 70 competitors all in the same market. It might be a market where you have people who temporarily look a lot like very dominant, almost monopolistic players, but where there’s a lot of competition almost across industries, and where you have enough dynamism, enough opportunities for startups, that people like Facebook and Google occasionally get dethroned.

[00:20:29.04] Ben: I agree with that. I think there’s not enough documentation of negative network effects. Because, you know, on the way up, it’s exponential; potentially, on the way down, it can be exponential too. Are you saying that competitive or antitrust policy is difficult to execute, therefore, we shouldn’t try? Or are you just saying that we need to find new sort of yardsticks for anti-competitive behavior? Because similarly, you know, it’s difficult to look at concentration; it’s also difficult to look at price because so often these platforms lead to lower prices because they’re monitored indirectly.

Stian: I think the short answer is, it’s probably the latter of your two things. It’s more that we need to kind of come up with new ways of analyzing this new way of looking at it. And that’s really tricky because one of the nice things about the world of 20 years ago, if you were a competition regulator, your job — I don’t want to say it’s easy; it was a difficult job — was quite rules-based. There were ratios and there was a whole academic infrastructure of how you would think about the concentration ratio in a particular sector, although a lot of judgment needed to be applied to that. That was kind of some yardsticks. I think if you’re looking at this kind of thing now, it becomes much harder. And in the same way earlier that we were saying that to be a sell-side investment analyst, scale becomes more important and the job becomes harder. I think that’s also true if you’re a competition regulator, which I guess where that takes you, if you’re to say, “What does this mean for politics or for public policy?” is a really unfashionable position. Basically, it means you need to spend more money on people who’ve been derided as bureaucrats and pencil pushers, more money on their analytic ability, and be more willing to at least consider innovative approaches to how you do those kinds of things.

We shouldn’t use the intangible economy as an excuse to give up on doing just the basic stuff to make society fair.

[00:22:14.20] Ben: But it all becomes a bit less objective, doesn’t it? Because in the same way that… You know, a sell-side analyst you could sort of test in advance their ability to understand the company accounts, or you could test civil servants’ ability to understand a legal framework, or similarly, you know, financial information. It’s very difficult ex-ante to understand or to kind of determine how good people are going to be at those jobs, right? How much to pay them and so on, right?

Stian: Well, it becomes much more judgment-based. And one of the things that we know from, there’s, I think, a whole branch of Management Science, looking at this kind of thing, that if it’s harder to measure performance in these jobs and more discretionary and more judgment-based, that typically leads to higher salaries, and it’s a more costly process to run.

[00:23:03.07] Ben: But I think in the world of antitrust if decisions are taken more based on judgment, then I suppose they’re more open to legal challenges and so on.

Stian: Yeah, you’re absolutely right. I mean, it’s really interesting. We see that across the piece as a result of intangible, so it’s not just… I mean, we can come on to talking about this a little bit later, but this is also an implication of spillovers, for example. We are probably in a world where one of the issues of spillovers is businesses will invest less than is kind of socially optimal in stuff like r&d. If you’re in a world where you want more r&d investment, but businesses won’t do it, that probably means you need governments or research institutes to do it. Again, that’s quite a judgment-based process, so you’re sort of saying you’ve got to trust people in positions of authority to do this kind of thing, which is particularly challenging in today’s political circumstance. So that’s a real dilemma.

[00:24:00.21] Ben: Do we need stronger IPE protection? Because I guess that’s, again, a double-edged sword, which is, what’s the right balance to anything?

Stian: So I guess the things we’re trying to balance, the spillovers of intangibles would suggest that you want kind of tough clear IPE rules because you want to make sure that the stronger your IPE rules, the more the incentive to own IPE and to invest in it are. Now, the problem, the thing that complicates that is the synergy between intangibles. So, if you take a product like Spotify — it’s a great example of something born from the synergies of intangibles, because you’ve got music rights, which are kind of one intangible asset, you’ve got the software, and the network, and the customer insight that Spotify has. By combining those, they’ve created a really valuable product that many of us are very happy to use. Now, suddenly, what people at Spotify have always told me is that if the music rights industry had their way, if they had tougher IPE rules and kind of more political influence that Spotify would never have been allowed to get off the ground. They would have been sued and out of existence in their first year or two. Now, I guess that’s the kind of great example of if your IPE rules are too strong, you don’t have a problem with spillovers so people will very happily make lots of music because they’ll make lots of money from it. But you’ll never get an innovation like Spotify, because it will always get crushed. So, I guess this comes back to what you’re saying. You need to strike the right balance between the two.

One of the ways to tackling inequality in an intangible economy, surprisingly, is through a very tangible asset — it’s through housing. It basically means that making it easier to build housing, making it cheaper for people to move to places they want to move in, becomes even more important.

Stian: I guess one interesting — if we sort of say, well, what’s the current failure mode of IPE rules? I suspect there’s probably quite a range of IPE rules that would work okay. What doesn’t work okay is a set of rules where there’s a huge amount of opportunities for special-interest lobbying where things get very distorted. So I guess the US patent system is kind of notorious for this, where you’ve got specific jurisdictions where a lot of patent lawsuits take place because they’re particularly pro-rights holders. I think the East Texas courts for patents seem to be like that. Similarly, in the US, you’ve got quite a lot of uncertainty. So you might have come across the copyright lawsuit over Pharrell Williams and Robin Thicke’s song “Blurred Lines”. So there was a huge lawsuit where the estate of Marvin Gaye sued Pharrell Williams and Robin Thicke for basically creating a song that seemed very much like a song that Marvin Gaye had written. And what was really interesting about this case, is that Pharrell Williams says he actually set out to create a song that was inspired by the Marvin Gaye song, but didn’t breach copyright. And it turns out, you know, there is a whole industry of forensic musicologists who would advise you on whether your song breaches copyright or not. And what was interesting is, in this case, the case went to court and I think it was a jury trial, weirdly; the jury just came up with a totally unexpected ruling in favor of the Marvin Gaye estate, even though everyone thought what was going on was kind of probably okay, with the result that the music industry is still talking about this. They’re saying, “Oh, well, you know, in light of this trial, what are we allowed to sample? What are we allowed to be inspired by? So that’s a kind of example of where an unexpected, quixotic interpretation rule is especially damaging. In the same way that, you know, if your business owns a factory, and it is possible to repossess that factory, sort of, you know, 5% of the time based on the phase of the moon or something like that, it would create a lot less incentive to invest in fixed assets.

Stian: So I guess what that means, probably matters less about precisely how strict the rules are, as much as making sure they’re clear. It also means that if you’re a government, you need to spend quite a lot of effort resisting the efforts of either rights holders or lobbyists to make little exemptions and carve-outs in the rules in their favor. Having been on the other side of the table working for the government on IPE policy, it’s really difficult to do that. IPE lobbyists are really smooth, they’re very kind of effective, they’re very highly paid. So that’s a challenge.

[00:28:17.19] Ben: Okay, I want to move on next to inequality. Let’s start with the inequality between people, right? So you’ve already alluded to this that where you have the right skills, the payback is going up, remuneration is going up. What are the kinds of skills that are most in-demand in an intangible economy? The most valuable.

Stian: Some of them will be the skills that are probably obvious — the tech skills; if software and algorithms are really valuable, the ability to code, the ability to manage teams of coders, or the ability to kind of manage big scientific projects and research projects. Those are clearly going to be more important. But that’s probably obvious, everyone knows that. The things that may be a little bit less obvious, is that in a world where the spillovers really matter, where it’s really important to combine synergies, the ability to bring those things together, also matters a lot. And those are often kind of soft skills. They’re often skills of hustle and entrepreneurship or social skills, things like the famous reality distortion field that Steve Jobs was famous for creating. Those things potentially become even more important in an economy like this. The other thing that I guess is potentially troubling about this is a world where who owns these assets and who has the right to use them is less clear. You could be in a world where political influence or even soft social influence becomes more important — whether that is retired politicians taking on high-profile jobs, whether it’s Instagram influencers, those general soft skills probably become more financially valuable than they were worth 40 or 50 years ago.

[00:30:02.09] Ben: Who loses out? What skills are less valuable, less solicited in this new world?

Stian: Well, one direct effect is that in some cases, these intangible assets directly relate to making some more routine jobs even more routine than they already were. Kind of the proverbial example here is, say, working in an Amazon warehouse, where, compared to a traditional warehouse job, intangible assets allow you to be more monitored, they generate a quicker work pace, which I think most people say this makes these jobs less enjoyable and less well-paid than they would otherwise be. So there’s a kind of direct effect there. But I guess there’s also an effect where if what you’re seeing is social status, social privilege, educational opportunities become more important, the flip side is that the pain of not having those things gets higher. So, you know, if you are more socially excluded, if you’re in a place that doesn’t have these job opportunities, it’s kind of not surprising that you will feel more left behind and that your sense of social exclusion — which, you know, there has always been kind of a divide between the big city and the kind of small town or the countryside; that’s always been there culturally. But the fact that cultural divide gets kind of underpinned now by an even bigger economic divide, is kind of… You can see that playing out in our politics and our current society at the moment.

[00:31:24.22] Ben: We definitely see that bifurcation of society in things like the Brexit vote. 14–52. Are we seeing, do you think, in a way, more losers than winners? I mean, relatively speaking, right? Because, you know, we don’t see massive rise in unemployment but what we do see is potentially a big bifurcation in the quality of the employment and the remuneration of employment. And I’m just wondering, you know, since we can see inequalities rising, is that because, you know, there are increasingly a small number of winners, if you like, or big winners, and then the overall population is tending downwards, in a way, in terms of, you know, real income?

Stian: Yeah. I mean, I think it’s always hard to say what’s ultimately driving inequality, because you can always, even if you have an employment system that’s creating a lot of inequality, you can always tax, you can always redistribute to generate more equality afterwards. I guess the kind of an optimistic way of looking at this is that this intangible economy, as well, is generating some of these superstar jobs that are really prestigious and really highly paid. It also generates a lot of jobs that are potentially more satisfying, more fulfilling for people to do than your kind of traditional job 50 years ago — even if they’re not as highly paid. So, you know, there’s a lot of jobs in the creative industries that are not particularly highly paid but all the research that has been done on well-being suggests that people actually like doing these jobs much more than potentially some jobs in traditional manufacturing. So I wouldn’t be totally pessimistic, but it’s definitely something that we need to be aware of this bifurcation between these elite jobs, and the kind of more socially-excluded mass.

[00:33:09.24] Ben: What do we do about inequality in this way? Because we have, I suppose, a small number of superstar firms, a small number of superstar individuals earning, sort of excess rent, if you like, or whatever. Excess returns on their skills? Is the answer to tax that and redistribute it? Or is that an industrial age policy idea that doesn’t hold someone in the digital age?

Stian: I don’t think we should give up on tax redistribution yet. I think that is pretty important and is still worth doing. And, you know, for all the people who talk about international tax-avoiding companies, I think there’s still quite a lot of low-hanging fruit there. In a country like the UK, you can just employ more tax inspectors. And, you know, we kind of under-invest in that. There is probably a low-hanging fruit in just basic compliance. So we shouldn’t use the intangible economy as an excuse to give up on doing just the basic stuff to make society fair.

Stian: I guess what you then get is, I think there have been some interesting angles where aspects of the intangible economy maybe exacerbate unexpected problems of inequality. So, one thing that there’s been a ton of research on looks at the cities that do really well out of the intangible economy — researchers were both in the US and in the UK. One thing that’s really interesting, if you take the Bay Area, Northern California, a great example of a place that’s been very successful because of intangible assets; not just computers, even before that. And what research shows is that once upon a time, housing in and around the Bay Area was pretty cheap. It was easy to build more housing when you needed to, and therefore the cost of renting or buying a house nearby was kind of somewhat affordable. And what that meant is if you had people making a lot of money in, say, San Francisco, that money somehow got spread around, because it was easy to move from a poorer part of the US to San Francisco, even if you didn’t have high skills, and you could take a low-skilled job but because you’re in a place where there were lots of people making a lot of money, you would get a pretty high wage relative to what you would have got had you stayed where you were.

Stian: And what people like Enrico Moretti, an economist who looks at these things and documents it, is that that’s kind of changed because it’s become much, much harder to build new houses in places like San Francisco; it’s definitely true in the South-East of England as well. And what that basically creates is that creates a really hidden unfairness because if you grow up in a place where there aren’t a lot of great jobs, and for whatever reason, you’re lucky enough to have a good education, to have the skills where you can take advantage of the intangible economy, you probably have a high enough salary to make it worthwhile moving to London or San Francisco. You can afford the crazy rents, your landlord will suck up a lot of money. But it just makes sense and you can grow there. But if you aren’t in that position, you’re stuck where you are. So, the old world where — and it’s very unfashionable to talk about money trickling down or trickling out — in the old economy, it did that much more than it did now. And the real barrier, one of the real barriers was rent. So I guess what this means is, one of the ways to tackling inequality in an intangible economy, surprisingly, is through a very tangible asset — it’s through housing. It basically means that making it easier to build housing, making it cheaper for people to move to places they want to move in, becomes even more important.

[00:36:38.08] Ben: Yeah. So, I guess you can’t have social mobility without geographical mobility, or it’s much harder.

Stian: Well, it’s interesting. I mean, there was a very widely talked-about book a few years ago by David Goodhart, who talked about the idea that the world was divided into somewheres and anywheres and the anywheres were the kind of Metro elite who kind of went from New York to London and just kind of didn’t care and somewheres were kind of rooted in Pittsburgh or Grimsby or wherever, and kind of loved their city. But I think there’s another way of looking at that, which basically says, it’s not that people who David calls somewheres are unusually in love with one place and hate moving; it’s that we’ve made it so that even if they want to move, they can’t afford to, so mobility has become something that only the very privileged who are going into these high-paying jobs can ever hope to do. And in a world where a lot of this intangible economy is happening in particular places, that’s a very damaging burden to inflict on a country.

[00:37:41.21] Ben: Yeah, and I think you probably have great statistics on this but it seems to be also that the intangible economy maybe doesn’t throw up as many jobs as the tangible economy. And a lot of the job growth is in what we might call proximity jobs. And therefore, we’re sort of holding back the growth of those types of jobs by, again, not allowing geographical mobility,

Stian: Yeah, you’re totally right.

[00:38:05.08] Ben: It’s becoming more and more difficult for traditional lenders — you know, universal banks, corporate banks — to lend to corporates because it’s really difficult for them to get enough comfort over that kind of loan, where it’s made in the absence of collateral — you know, physical assets that a company can pledge to the bank in order to secure that loan. And I think, again, there’s another brilliant graphic in the book, where you show that, you know, despite everything we talked about the growth of intangible assets versus tangible assets, actually, the lending is going up against tangible assets versus intangible assets, which just seems perverse. Right? So is that the root of it? This absence of collateral?

Stian: Yeah, that’s right. So, I mean it’s been called ‘the curse of collateral’, the fact that banks, ideally, want assets that they can take a charge of if a business fails. That is the way debt finance works and most businesses in the economy rely on debt finance, most financial institutions provide debt finance. You know, if we talk about stock market or venture capital, those are modes of finance that apply to a very, very small minority of businesses. So, there’s a kind of real challenge here. On the one hand, how do you develop institutions to provide more equity-based finance to a greater range of businesses? But also, how do you make a rule system that doesn’t discriminate against that because obviously, the first rule of financial structuring for a business is that debt interest is tax deductible, but payments to shareholders are not. So, you know, you’d want to finance a business with that.

[00:39:45.17] Ben: So okay, there’s a lot to unpack. So the first question is, you know, should we change that? Should debt not be tax deductible?

Stian: The kind of wonkish answer, the ideal world answer is, yeah, you want to change that. You want a world where debt finance and equity finance are placed on the same footing. And, as I said, this is quite wonkish. This is something where economists and tax policy wonks have come up with 1,000,001 proposals for exactly how you do this and all the things like equity tax credits. The problem is this, politically, would be a really hard thing to do. I mean, if you were to try and change the economy like this, you’d immediately have the private equity industry up in arms, you would create a lot of challenges for the banking system, it would be a big change. So, you’ve got to think not just about what’s the ideal end-state, but also what’s the institutional basis for it and how do you get there without totally causing lots of unintended harm to the economy.

[00:40:45.20] Ben: Exactly. Because you then form policy in a vacuum away from all the subpart dependencies. But maybe a better question might be, then, how do we get more VC-type capital flowing to the economy?

Stian: So I think that’s a really good question. Germany is an interesting example here because if you look at the way German banks do business lending, they very often will take equity warrants in small businesses, which is effectively like a way of making your debt finance more equity-like. And one of the effects of that is, if you look at, say, a British small business lender — you know, British High Street bank making loans to small business — almost invariably, they will look to take charge on the owner’s or director’s house. And that caters to the idea that the owners own their own house, which is obviously quite an assumption anyway. So it kind of skews you towards lending to a certain type of person. Now, that’s basically a way of getting tangible collateral, in a business that’s mostly intangible because a house is kind of pretty tangible. Now, in Germany, probably partly because homeownership rates have always historically been much lower, and more people rent in Germany, banks are gonna have to find a way around that. So these equity warrants is something that they’ve always done. Now, it means the banks end up doing more due diligence into the businesses because you need to understand more about how the businesses work. But I guess, they figured that’s a worthwhile cost, because the upside of these equity warrants is quite high. So, I guess that’s one example of it being done well. I mean, if you look on the fringes of the venture capital sector, it’s really interesting to see different types of more kind of growth-oriented venture capital branching into more markets and I think it’s really interesting from that point of view. So, I think we’ll see a gradual growth there. But this is really hard. This is a 10-year project, and will probably require governments to get behind it, too.

[00:42:40.18] Ben: Now, a lot of these intangible businesses have become a bit better understood. And, you know, so you see people lending, for example, or putting debt into businesses that have SaaS revenues, or you see people putting debt into businesses where they understand the mechanics of a game, for example — you know, they know the points of which a game is going to get large pickup, and they’re happy to invest to allow the games provided to invest in paid advertising on Facebook or whatever. So I think maybe the idea that debt no longer works is perhaps too simplistic and maybe just debt needs an upgrade.

Stian: That’s definitely true. And I guess, obviously, you know, as anyone involved in that markets will know, some lending is against collateral, but actually, you know, a ton of debt is lent against cash flows and expectations of cash flow. But I guess, to your point, what that does, it requires a greater understanding of what those cash flows look like. And, again, this is another one of these things, where it advantages the smart money. If you can understand these streams of cash flows and get enough certainty to be able to lend against them, then knowledge is unusually valuable.

[00:43:49.14] Ben: Something that’s only really occurred to me lately, since I started a business, which is, if I invest capital on the stock market — this may vary jurisdiction to jurisdiction — I face a capital gains tax of x, right? And that capital gains tax is the same as if I take a much more risky stance of investing in a business that creates employment, generates intangible assets with spillovers. So do you think we need a separate treatment of people, depending on where the gains from capital come from?

Stian: That’s really interesting. We’ve got some kind of limited examples of that already. You know, there are some tax breaks for providing risk capital either in the UK — things like the seed enterprise investment scheme, venture capital trusts, and so forth. So, that principle is there already, but it’s a really interesting question. I think, broadly speaking, you know, if the spillovers are good, then ways of subsidizing those — whether that’s through direct funding or tax breaks — it seems like there’s a strong economic case of that.

[00:44:54.06] Ben: And then the last question I wanted to ask you in this section was really around the role of government here because you’ve probably seen it — you know, there’s Mariana Mazzucato. In her diagram where she said the constituents of the iPhone and how many of them were spillovers from government fundamental research. And I’m just wondering, you know, there’s been, I would say, a reduction in government fundamental research in lots of countries, right? Because, you know, there was this sort of ideology of that crowding out public, private sector investment, and so on. But do you think we should maybe shift the balance there and the debate and push more money towards fundamental research?

Stian: I think there’s definitely a really strong argument saying the government should be funding more things like r&d, because they have these spillovers. If you just leave it up to business, you will get less of that than you would otherwise get because businesses can’t be sure they will internalize the benefits. And I think one of the really important things that kind of Mariana’s book really made the case for that in a kind of very powerful way, which is really important. I think there’s a lot of questions on how you do that, what the best way of doing that is, and particularly doing it in a way so that businesses also invest alongside because obviously, what wasn’t told in that story of the iPhone, is that alongside lots of fundamental research, there was also a ton of often quite unrewarding r&d done by businesses, whether it’s gonna join Magnetoresistance, which is how you got the kind of hard disks that these devices rely on, to the actual turning these things into useful consumer-friendly products. All of that requires a lot of investment as well, which often has quite high spillovers. So, public investment, yes, we absolutely need more of it. And it’s quite well that a lot of governments, I think, are moving in that direction. It also becomes even more important to work out how it may not mesh well with what businesses want to do.

[00:46:44.17] Ben: So many people talk about this sort of K-shaped economy, where everything that was analog is really suffering and everything that was digital or intangible is kind of accelerating. And I’m just wondering, is that a too simplistic read of the situation? I wanted to start with how intangible assets fare during the lockdown, for example, because I’ve read a piece that you wrote on Medium where you made this somewhat counterintuitive argument that actually intangible assets might not be faring as well as you might think, during a lockdown.

Stian: Yeah, absolutely. I mean, I think the pandemic was very interesting from the point of view of what you said for the intangible and the tangible economy, because when it started out, I think there was a huge focus on whether we’ve got our tangible asset response right, the way I would describe it. So people sort of say, you know, “Can we build enough hospitals? Do we have enough ventilators? Do we have enough factories making personal protective equipment?” And you know, everyone was very impressed when in Wuhan they built this huge new hospital, and we would say, you know, “Will the UK be able to cope? Will the US be able to cope?” And then we built the Nightingale hospitals, this is great. Wow. So this was all about tangible assets, you know, physical things. But I think what people kind of rapidly realized is that, actually, that wasn’t the real challenge and it wasn’t the thing that people struggled with, because actually, what people came to realize was really important was what you could call intangible assets. So, first and foremost, it was, “Can we develop vaccines that are effective? And can we put in place the supply chains to get them out there?” Both classic intangible asset problems. “Can we put in place tests and trace systems?” Test and trace systems are made up of software, they’re made up of processes, they’re made up of data? You know, those were classic examples of intangible assets. And some countries did them really well and some countries did them maybe not so well. And I think if you look at the differential mortality rates in different countries, it was, in some ways, the intangible response that really, really explained the bigger gaps much more than the tangible assets. So, I think that was kind of one interesting aspect of how the focus changed. I guess another really interesting question here is the move on what many people’s part remote working has done. So, certainly, in the UK, the latest statistics, 35% of people are now working entirely remotely. The historical figures for that before the pandemic struck have been less than 5%. So, that’s a really big change. And of the 65% who are not wholly working remotely, a fair chunk of those people are doing some remote work. So although this isn’t the majority of the population, it’s a really big chunk of people, it’s a really big change.

[00:49:38.17] Ben: And what happens to spillovers in the world of remote work? Because, you know, I think, again, it was in the same article, which I very much recommend to people — it’s on Medium — which is you talk about how during Prohibition you could trace a reduction in the number of patents because people needed to meet in bars to come up with some really brilliant creative ideas. And I think there’s some element of that, which is, you know, even though, ostensibly, we’re still interacting with our colleagues in a very collaborative manner, it’s different, right? It’s different if you’re remote, and you can’t go for a beer or coffee, whatever, and have those brainstorming moments, those moments of serendipity. Is it your hunch that this is going to lead to fewer spillovers.

Stian: So I think this is the $64,000 question. So, no one really knows and I think, to some extent, it’s probably up for grabs. It’s almost certainly true that it’s going to have some effect on spillovers, because you’re not getting these, as you say, these casual interactions that maybe some ideas depended on. The question is, you know, to what extent can we replicate them? To what extent, maybe, can a lot of remote working work well? And to what extent can we come up with ways of doing more remote working that gives you just enough of what you need? I mean, there was that famous saying, where, I don’t know who said it, but it was, “50% of my advertising works, I just don’t know which 50%.”

Ben: Oh, yeah.

Stian: It’s probably the same. You kind of think, well, you know, there’s probably some really important part of the time you spend in and around the office with people but it might actually only be 10% of that time. And the question is, can you work out what that is, and focus on that more effectively? So I think if we can do that, there’s a huge benefit, because remote working is incredibly good for productivity. But you know, it’s a big forced experiment.

[00:51:34.29] Ben: Well, I think the thing is the experiment is going on for a very long time now. So I’m sure people are starting to codify some of those things that there’s moments of serendipity and putting them into the way that we do remote working. Because in the beginning of the pandemic, it was very much kind of everything just moved to Zoom. And now I think people are realizing, for example, that, you know, just doing things synchronously through Zoom is not great, and Slack sometimes can be a better medium, for example. I think people are sort of now adapting the way they do remote working.

Stian: I think that’s totally true. And it’s interesting, you know, there are some industries that have been doing this for longer. So, you know, huge parts of the tech industry have been very comfortable with aspects of remote working and having remote development teams, as you say, using asynchronous communication and text communication much more than video conferencing. And I guess the real question is, can we work out the lessons for that? And can we scale them up quickly? Because that could be really valuable.

[00:52:28.15] Ben: You started to talk about San Francisco earlier on, and I had to hold myself back from delving into that. But on a few podcasts ago, we had Ian Hathaway on, and he was talking about his idea that, you know, smaller and smaller cities, if you like, can learn from San Francisco to some extent — you know, replicate the playbook. And I’m just wondering, does that diffusion of the magic of Silicon Valley happened faster now? Because maybe that was less important than it was to be in physical proximity?

Stian: Yeah, I think this is a real opportunity for anyone that wants to compete with Silicon Valley to make the most of it, partly because it’s about getting new norms in place that will help these areas. So, if we can get more comfortable with remote hiring, if we can get more comfortable with remote VC funding — something that’s often driven proximity — then this is a sort of an opportunity, as you say. There’s a kind of two-year window where some of these new practices could get trenched and people could realize their worth. That’s a huge opportunity to make a step-change. I mean, I guess the other dimension talking about San Francisco — San Francisco has kind of an interesting story. So, you know, I worked in Silicon Valley at the beginning of the 2000s. And San Francisco wasn’t really a part of the Silicon Valley ecosystem back then. The idea that this one big city is kind of the epicenter of tech is, as far as I can see, kind of something that it’s the kind of last-decade phenomenon. Silicon Valley for a very long time was just kind of the suburbs of Palo Alto and Mountain View, and places like that. And so, there’s kind of an interesting question. Well, you know, maybe the move to really core cities — maybe we might take a step back from that. So I definitely think it’s a lot to play for. You know, if you’re a city leader, or you’re someone who wants to kind of build a cluster somewhere other than San Francisco or New York, or London, then this might be a big opportunity for you.

[00:54:35.14] Ben: One of the things I thought was interesting in that article you wrote is you said that a tangible asset during lockdown doesn’t get used, right? And therefore, the productive capacity of that asset is kind of frozen. And then once things get back to normal — whatever that normal looks like — it then becomes productive again. What you said about some of the intangible assets is they degrade much faster in the absence of being used, right? And again, it was something that I thought was quite interesting because I think there’s been this assumption that everything intangible is benefiting and everything tangible… You know, you wouldn’t want to be an airline. And it was just a more nuanced kind of view of tangible versus intangible assets.

Stian: Yeah, you’re right. I mean, there’s this kind of question we were thinking about what’s the economic cost of leaving an asset, a business unused for a while, and we were speculating that maybe for a very physically-intensive business, that cost was lower. So it was easier to kind of mothball a factory and turn it back on, again, than it is to mothball an advertising agency and turn it back on again. But that’s very speculative and I think that’s something that I don’t think anyone knows the answer to that. So, there’s lots of real-time economic puzzles kind of going on right now.

[00:55:51.10] Ben: Okay, and this is the only political question I will ask you, which is, do you think that the pandemic is kind of giving a backdrop, or a unique set of circumstances in which somebody like Joe Biden could introduce a massive set of policy initiatives — a new deal, if you like? Because one of the things that we’ve talked about, every sort of policy initiative we’ve talked about: we’ve talked about some really difficult politics around it. For example, you know, opening up planning restrictions, I’d imagine is a very difficult political thing, changing the tax relief on debt would be a very difficult thing politically to introduce. So, does it give the pretext for more ambitious political maneuvers?

Stian: I think there is definitely the need. You know, there is a platform of policies that would be really great to put in place, whether that’s more investment in r&d, planning reform, making sure that we create opportunities for people to take on these new jobs, investment in education. There’s definitely a need for that. I think the really difficult thing is that in an age of populism, all these things get harder to do. So I talked to you earlier about when we were talking about the competition policy, that really actually what you need is, you know, more bureaucrats, more pen pushers, and to give them more power. Now, that is a pretty hard sell in the age of queueing on and, you know, ramp and populism in most countries. So you have this kind of weird situation, the need for this kind of institutional reform is greatest at a time when the political dynamics push you in the opposite direction. You know, if you want to sort of say, “Let’s spend more money on r&d, because that will lead to good business opportunities and create economic growth and more jobs.” What does it mean, when you say, “Invest more in r&d”? It means you’re going to tax people more, and you’re going to pay that money to kind of liberal elite scientists. That’s the kind of paradox and I think it’s really interesting to see different people trying to negotiate that in different ways.

[00:57:53.25] Ben: And you don’t think that the pandemic gives kind of enough political capital to unlock the paradox? So you think it’s not as simple as that?

Stian: It might be, you’re right. You’re totally right. Maybe the pandemic will give the opportunity to do this. And maybe it’s the kind of thing where even if you can’t do the big push, you can get some of the way there and that will still make a difference. It’s definitely tricky, because the politics and the policy push in opposite directions.

[00:58:23.04] Ben: Would you mind sharing with us one of your favorite books?

Stian: A really interesting book I read recently, is a book called “The Hungry Empire” by Lizzie Collingham. And what’s fascinating about it is it’s basically a book about the history of the British Empire seen through the history of food. And what’s so interesting about this, it obviously speaks to a lot of issues around global history, around race, around the relationship between Britain and the rest of the world, all of which is super topical at the moment. But it does it through a prism that I think will be really interesting to anyone who’s interested in technology, in kind of economics, in kind of the business of how the world works. It’s a long way from technology, but in some ways, it’s a book that’s very much about technology and a lot of issues in the world today. So, it gets a strong recommendation from me.

[00:59:12.19] Ben: Okay, I’m gonna read that, and, for the listeners, we’ll share the links to all of these on our website. So the next one, a favorite recent article.

Stian: For me, I think something I would absolutely recommend here is the work of Enrico Moretti on cities. We talked a bit about it earlier, but he wrote a great book called “The New Geography of Jobs” and a few articles based on that where what he looked at was the way that we live in a world where great cities, dynamic cities are increasingly economically important. But one of the problems that we have is that the ability to live there, to afford to pay the rent there or move there is unequally distributed because we make it harder and harder to build in these cities. And he effectively made the case that it is totally kind of countercultural range where we like to talk about somewheres and anywheres but he talked about the fact that actually what lies at the heart of our problem is the fact we’ve made it harder to move. And this is not something that people actually want. There’s not something that makes people happy. So to me, it’s a very important and topical article right now.

[01:00:15.02] Ben: And then, the next one is a favorite thinker, somebody whose essays and articles you regularly turn to.

Stian: This may be — I don’t know if all of the people you have on say this, but I’m addicted to the blogger Scott Alexander, who used to write Slate Star Codex. He’s now gone on to Substack and the new version is called Astral Codex Ten. You may know, he’s a US-based psychiatrist, he’s kind of very involved in the rationalist community. He writes about technology, economics, psychology, about kind of almost anything. He has an absolutely incredible writing style. Everything he writes is an absolute breeze. But he does it with a kind of an incredibly good nature. So a strong recommendation from me.

[01:01:04.17] Ben: This is exactly why we ask these questions because I confess to not knowing Scott Alexander.

Stian: It’s amazing.

[01:01:11.03] Ben: Okay, the next one: a productivity hack, something that enables you to operate at scale in the intangible economy.

Stian: This is a very weak productivity hack because I’m very bad at it, but I do try and do 10 minutes of mindfulness meditation at the beginning of every day, and I’m probably the worst meditator in the world but either because of some kind of placebo effect or because it’s useful, it does make me feel a little bit more on top of things.

[01:01:39.28] Ben: Okay, and then the last question is a favorite brand.

Stian: My surprise favorite brand I think it would have to be Bovril. I rely on Bovril for my protein needs. It keeps me going in home working, kind of always have a mark of it on the go. It’s a remarkably nutritious food. And it’s got a retro appeal in the sense of it’s something that was very big 100 years ago, but has kind of come back into popularity in an age of high protein, low carb eating.

[01:02:09.29] Ben: Yeah. And I think it’s something that’s quite polarizing. So it’s good that you’ve taken a slightly controversial position there. That’s good.

Stian: I’d like to think so.

Ben: I guess many people that listen to this will not know what Bovril is. So that’s gonna be interesting to see and googling.

Stian: Yeah. A very affordable, a very accessible product as well.

Ben: Great. Stian, this has been an absolute pleasure. Thank you so much for coming on the podcast and sharing your insights around this structural shift from the tangible to the intangible economy.

Stian: Thanks so much, Ben. It’s been a real pleasure talking to you about it.