Welcome back to the Ten Blocks podcast. This is Brian Anderson, the editor of City Journal.

Joining me on the show today is Steen Westlake. Steen is an expert on technology and innovation

policy based in the UK, where he's advised the government. He is co-author with Jonathan Haskell

of the fascinating book, Capitalism Without Capital, The Rise of the Intangible

Economy, which was selected as a book of the year for 2017 by The Economist, the Financial

Times, National Review, and Marginal Revolution, and is described as required reading

for policymakers by Bill Gates.

Together, Steen and Jonathan have co-authored an essay for the new issue of City Journal

entitled An Agenda for the Intangible Economy, which explores how future productivity and

prosperity depends on how well our institutions and policymakers adapt to the

realities of the new intangible economy. The essay isn't available on the City Journal website

just yet, so stay tuned for that over the coming weeks and take this as an opportunity to

subscribe to the magazine if you haven't already.

That's it for the introduction. My conversation with Steen Westlake begins after the music.

Steen, welcome to 10 blocks. Steehan, welcome to 10 blocks. To start with, for our listeners, how do you define this emerging economy you describe in your recent book, Capitalism Without Capital and in your City Journal article,

which you call the intangible economy. What

characterizes the intangible economy? The essence of the intangible economy is that

we're seeing the emergence of a new type of capital. What I mean by that is the stuff that businesses

invest in has changed. Once upon a time, it was predominantly physical things, machines,

factories, vehicles. Now, the majority of business investment in a country like the US or the

UK is stuff that you can't feel or touch. It's things like research and development,

organizational capability, branding, artistic originals. And these things

...