Goodbye Plant and Equipment, Hello Software

Round-number bids, tailoring primary care incentives to the health of a state population, and one benefit of industry incumbency

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Intangible assets (patents and software, and goodwill from acquisitions) back in 1975 — the days of physical assets (plant and equipment — were 17% of the assets of the S&P 500 companies. Today, in an economy dominated by Microsoft, Google, Apple and the like, intangibles represent about:

30% of S&P 500 company assets.

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Round-number bids — offering an even $100 million for a privately held company a bidder might value at, say, $97 million — are designed to scare off competing bids and demonstrate serious intent. They also affect timing to close:

Reducing the normal 87 days to 76.
To 66 days.
To 56 days.

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Health care is complicated, and sometimes the structure of effective incentives is counterintuitive. In a program trying to get primary care doctors to correctly balance telehealth visits, in-office visits and referrals to specialists, should Medicare pay physicians:

More for a primary care visit in a state with a sicker population.
More in a state with a healthier population.
The same amount nationally.

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Startups are more nimble than older companies, according to modern wisdom, and the widespread availability of capital and technology means new entrants can often run circles around established firms. A sticking point, though, is skilled labor and managers. When Brazil’s OK of ethanol set off a boom in sugar cane:

Established sugar mill operators accounted for three-quarters of the growth, or 91 out of 122 new mills.
Some 18% of managers at those mills were transferred from existing operations.
6.4% of the total workforce at those new mills was made up of inter-company transfers.
All of the above.

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A study suggests 20 countries — each either a former Soviet republic or satellite — achieved a decade of economic growth 1.38 percentage points annually above their previous rate, as they:

Became home to Apple retail stores.
Adopted a flat income tax system.
Tore down statues of Stalin and Lenin.