IC and Long-Term Wealth Creation at the National Level

In the past, tangible resources may have decided over 70% of a nation’s economic growth. Nowadays, intangible resources are becoming the larger contributor to not only national economic growth but also national well-being, which in turn captures non-financial factors such as health and happiness of a country’s citizens. Global tangible resources are limited and depleting day by day, whereas intangible resources, such as knowledge, instead accumulate over time. In February 2013, the newspaper the Economist ran a special report on the success of Sweden, Denmark, Norway and Finland – collectively known as “the Nordics”. These countries rank near the top across various benchmarking reports measuring the health of a society, from perspectives such as global competitiveness, ease of doing business, global innovation and prosperity. The Economist was curious to understand: “Why has this remote, thinly populated region, with its freezing winters and expanses of wilderness, proved so successful?” According to the same special report, the answer lay in a combination of honest and transparent Nordic governments, and among their citizens, the ability to trust in strangers and a strong belief in individual rights. “Trust means that high-quality people join the civil service. Citizens pay their taxes and play by the rules. As a result, government decisions are widely accepted.” (The Economist 2013). Furthermore, in addition to continuous structural reforms, the Nordic countries invest in human capital and protect people from the disruptions that are part of the capitalist system.