Many have been said about the New Economy.
Alan Greenspan, former US FED Chairman, puts it succinctly when he said that “virtually unimaginable a half-century ago was the extent to which on concepts and ideas would substitute for physical resources and human brawn in the production of goods and services.”
The new economy is built upon a foundation of new technologies, globalization, a new generation of people entering the workplace, and the increased importance of intangible assets.
It never ebbs… Instead, it becomes easier nowadays, for new technological start-up entrepreneurs, to get funding, survive and become big players in the New Economy.
Take, Airbnb – It is a website for people to rent out lodging. It has over 800,000 listings in 33,000 cities and 192 countries. It was founded in August 2008 and headquartered in San Francisco, California. The company is privately owned and operated by Airbnb, Inc.
Distinction between Value Creation and Value Realization
Value creation – future value captured in the form of increased market capitalization – is how successful businesses are creating value in the New Economy .
It varies according to market sentiment and the price people are prepared to pay, to purchase its stock. For example, Microsoft’s market value at around 1999 stood at US$ 602.4 billion – built almost entirely on intangibles. Today, in Oct. 31, 2014, it stands at capitalization of US$ 387.32B.
Value realization – value captured in the form of past and current earnings or cash flows – is what underlies both traditional accounting and most of today’s management information systems.
CUPERTINO, California—October 20, 2014—Apple® today announced financial results for its fiscal 2014 fourth quarter ended September 27, 2014. The Company posted quarterly revenue of $42.1 billion and quarterly net profit of $8.5 billion, or $1.42 per diluted share. These results compare to revenue of $37.5 billion and net profit of $7.5 billion.
Warren E. Buffet, the chairman of Berkshire Hathaway says: “Book value is meaningless as an indicator of intrinsic value.”
“Sometimes what counts can’t be counted, and what can be counted doesn’t count.” – Albert Einstein
“If you want to do something new, you have to stop doing something old.” – Peter Drucker
Think human
Unless you’re in the business of sterilising things, business is no place to be sterile. Have the boldness to look beyond numbers and spreadsheets and allow your heart to have a say in the matter. Bear in mind that the intangibles are every bit as real as the metrics – are often even more important. The simplest and most effective way to connect with human beings is to speak with a human voice. It may be necessary in your business to market to specific target groups, but bear in mind that every target is a human being, and human beings respond to simplicity. Best advice: Just be true to your species.
(Quote extract from The Secret of Apple’s success, Ken Segall, The Guardian,
People who own and use Apple products, become big and enthusiastic fans. They are the ones that make Apple become so successful, year after year.
The Value code of Business could be applied to any company, big or small.
It is a journey that involves
- See What Matters
- Invest in What Matters
- Manage What Matters
“The next information revolution.. largely underlies the new definition of the function of business enterprise as the ‘creation of value and wealth.'” – Peter Drucker
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Website: http://www.reubenointernet.com/
Email: reubeno@reubenointernet.com
