Works in Progress Podcast Stian Westlake on the intangible economy and paying for social science
Jul 11, 2025
Stian Westlake, Executive Chair of the Economic and Social Research Council and author of *Capitalism Without Capital*, dives into the nuances of the intangible economy. He explores why London's economy is distinct from Germany's, while questioning why restaurants struggle to scale. Westlake debates the government’s role in funding social science research, and the complexities of navigating intellectual property rights in an economy driven by intangibles. He also highlights the challenges and biases that arise in securing diverse funding for impactful research.
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Rise of Intangible Capital
- Intangible capital like R&D, software, and brands is now more valuable than physical capital in rich economies.
- This shift changes economic dynamics, favoring scalable businesses and increasing the importance of public co-investment.
City Clusters vs. Manufacturing
- Cities matter more in intangible economies due to agglomeration benefits and spillovers.
- Manufacturing economies like Germany's spread out because physical capital needs more space, unlike intangible-based ones.
Spillovers and Face-to-Face Interaction
- Spillovers often occur through labor mobility and imperfect intellectual property protection.
- Face-to-face interaction remains crucial for effective idea transfer despite digital communication.
