Ratio of physical to digital/human capital. How much physical infrastructure anchors your organization in place?
WEIGHTLESS VS ANCHORED
Minimal physical footprint. Cloud infrastructure. Can scale or pivot without building anything. Human and digital capital dominate.
Massive physical assets. Factories, refineries, hospitals, campuses. Capital decisions made decades ago still constrain today.
Physical capital creates inertia.When you've invested billions in refineries, you don't pivot to solar. When you've built a hospital, you don't switch to telemedicine. Capital intensity determines how fast you can change direction.
High capital intensity creates powerful incentives to protect existing investments, even when they're becoming obsolete. Executives are measured on returns from capital already deployed, not on adaptation to new realities. This creates structural resistance to transformation.
Capital/revenue ratio for software companies
Capital/revenue ratio for oil refiners
Purely digital. Server costs are the main infrastructure.
Software layer on financial rails. No physical footprint.
Refineries, pipelines, storage. Billions in physical assets.
Multi-decade asset commitments. Infrastructure that spans continents.