Intangible assets are raising increasing interests among scholars, policy-makers and firms themselves. Companies across countries and sectors stress the increasing importance of human resources, organisational learning and building of capabilities as factors for competitiveness. Some firms are attempting to include measures of their intangible assets into their annual report. Studies of intangibles are developing in both the management and economics literature. The European Commission is stressing the need to formulate policies that favour the development of intangible
assets.
Yet the nature, determinants and effects of intangible assets are not clear. Sometimes examples of intangible assets are given as innovation, organisational practices or human resources.
Sometimes there are considered as generators of intangible assets and not intangible assets as such.
The confusion probably derives from the fact that some assets are simultaneously assets and generator of assets (e.g. knowledge); in addition, intangible assets may be created by a combination of generators: for example, a patent, i.e. an innovation, results from both R&D activity and organisational assets, R&D activities being more effective in certain organisational environments.
In this paper, we analyse intangible assets in the pharmaceutical industry, in order to derive insights as to their nature and their determinants, as well as implications for the health industry model.
We define intangible assets as knowledge and capabilities that, combined together and with tangible assets, generate innovation, increase productivity and value. This definition implies an emphasis on complementarities between assets and activities.
The major implication of the analysis is to provide a deeper rationale for the health industry model. The latter model considers health as a system, between health care providers, financing organisations and health care producers (i.e. producers of drugs, medical apparels, etc.), because their separate consideration leads to the ignorance of important spillovers between the various parts.
We show that the major source of spillovers appears to be the complementarity between tangible and intangible assets, and the rise of intangible assets observed in most industrialised countries over the last decades is the reason for the rise in spillovers in the health industry, hence the need to consider it as a system. Policy implications in terms of the competitiveness of the European pharmaceutical industry are also drawn.