For millennia, the world economy grew incrementally and slowly based on population growth and increasing trade across distances. Conversion of raw materials to finished goods was achieved through manual labor and processes – often through trial and error that could take centuries. After nearly 5,000 years of recorded history, the Industrial Revolution changed everything. Businesses that deployed factories and machinery, otherwise known as physical capital, achieved significant leaps forward in production. Productivity and output leapt forward, and the world got a little smaller.
By the 1900s, the explosion of service-based industries meant that for many businesses the measure of corporate performance shifted to people, or human capital. Today, we’re seeing another major leap forward as more and more organizations embark on a digital transformation of their business, and increasingly the value of the modern enterprise resides in its applications and data.
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