09.25.06
Business Success Measured in Human Capital
A recent study by Stats Canada found that the financial and management skills of a business are the keys to business success, even more so than its asset and equipment growth. Investments in physical capital, such as machinery, equipment and production facilities, are often viewed as hallmarks of a growing company. However, the survey found that the development of intangible, knowledge capital-organizational capabilities, associated with the growth process, is far more important if you plan to stay in business for the long-run.
The study reported that many businesses that had failed pointed to their deficiencies in general skills, notably in financial and general management as the reasons why. Successful new businesses that succeeded often placed a strong emphasis on ‘getting the fundamentals right’ in a wide range of strategic areas.
The paper called “Innovation capabilities: The knowledge capital behind the survival and growth of firms” is available on the Stats Canada website.
