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SchmidPreisslerConsultants · Innovative Strategic Advice - Research - Analysis - Market Solutions · Established 1961
October 2025
The new fourth factor of production –the human brain or knowledge?
by Dipl. Volksw. Christina Schmid-Preissler
First introduced by Peter Drucker in 1968, the topic of “knowledge” has become increasingly important in the modern economy in recent years. Today, it is often regarded as the fourth fundamental intangible factor of production, alongside the material factors of labor, capital, and land, in the manufacture of products and services. The reasoning behind this is usually that labor encompasses physical and mental human activities, capital refers to operating resources such as machinery and financial resources, land refers to natural resources and land area, while knowledge represents the expertise and experience required to create value.
Although knowledge and education are, of course, important factors in service provision that serve to make production more efficient, knowledge differs from all other productive resources in that it becomes obsolete. Today's latest findings represent tomorrow's ignorance. The knowledge and insights that are essential for successful business are subject to rapid, often even abrupt changes. This applies, for example, in healthcare, from pharmacology to genetics, or in the computer industry, from PCs to the Internet.
The human brain is completely different. It is the source of knowledge and, as a network consisting of around 86 billion nerve cells, it can constantly reconnect itself, establish new neural connections or dissolve old ones, depending on the circumstances.It does not need commands from above; it works perfectly well on its own.
At a time when automation and digitalization are taking over many routine tasks, human intellectual performance is becoming a decisive competitive advantage. New technologies are not created by machines alone, but by human thought, research, and invention. The brain makes it possible to improve existing production methods, develop new business models, and respond flexibly to changes in markets and society.
In addition, the human brain plays a central role in the organization and coordination of other factors of production. Land, labor, and capital can only be used effectively if someone has the ability to combine them in a meaningful way. This intellectual control and strategic thinking are achievements that can only be accomplished by the human mind.
This makes it clear that the human brain is the decisive factor of production, as it is the only entity capable of generating, interpreting, and innovatively applying knowledge. Furthermore, the human brain is not only an additional and decisive factor of production, but also a link between the traditional factors. It ensures that resources are used efficiently and that innovations are created. In a knowledge-based economy, human cognitive performance is therefore the key to progress, prosperity, and sustainable development.
The SchmidPreissler-Brief team, Dipl.-Soz. Maximiliana Schürrle, Dipl.-Volksw. Christina Schmid-Preissler, Alexander Schürrle, and Franz M. Schmid-Preissler send their regards. If you would like to discuss the topic of the “fourth factor of production” with us, send us an email and we will call you back. Diese E-Mail-Adresse ist vor Spambots geschützt! Zur Anzeige muss JavaScript eingeschaltet sein!
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Für den Inhalt verantwortlich (MStG): Franz M. Schmid-Preissler - Anschrift siehe oben
