16 February 2026

Capital Asymmetry in aged care

Are you building the right advantage?

About 
Professor Richard (Rick) Watson 

Richard (Rick) Watson, Regents Professor and J. Rex Fuqua Distinguished Chair for Internet Strategy Emeritus at the University of Georgia, is a former President of the Association for Information Systems. He was awarded the organisation’s highest honor, the LEO, for his achievements in information systems. For approximately a decade, he served as the Research Director for the Advanced Practices Council of the Society of Information Management and as a visiting researcher at the Research Institutes of Sweden (RISE). In 2021, the University of Liechtenstein conferred an honorary doctorate upon him. He holds honorary professorial positions at Deakin University and the Queensland University of Technology, and is a Schöller Senior Fellow at the University of Erlangen-Nürnberg.

Professor Watson has published over 200 journal articles and written or edited over 30 books on topics such as electronic commerce, data management, and energy informatics. His most recent books are Capital, Systems, and Objects and Causal Knowledge Analytics. His work has been accepted by leading academic and practitioner journals and translated into several languages.  Dr. Watson has given over 350 invited presentations to practitioners and academics in more than 30 countries, including conference keynotes on six continents. He was educated at the University of Western Australia (BSc, Dip. Comp), Monash University (MBA), and the University of Minnesota (PhD).

Introduction

Australia's aged care sector is consolidating. Larger providers are acquiring smaller ones, workforce retention has become make-or-break, and reputation directly affects occupancy and pricing power. Most operators recognise they're under competitive pressure. What's missing is a clear framework for understanding where to build an advantage that competitors can't easily replicate.
 
Capital Asymmetry offers that framework. Developed by Professor Richard Watson, it draws on over a century of competitive dynamics (first in the automotive industry, from Ford's assembly lines to BYD’s focus on knowledge) to explain how organisations create a sustainable advantage. The core insight: competitive dominance comes from investing in specific types or mixes of capital (economic, human, organisational, social, symbolic, or natural) in ways competitors cannot easily match.
 
For aged care providers, this means making deliberate choices. Do you build advantage through workforce capability (human capital)? Superior systems and processes (organisational capital)? A reputation for quality care in specific communities (symbolic capital)? The providers who answer these questions clearly—and invest accordingly—are the ones reshaping market share, whilst others fight price wars or struggle with occupancy.
 
In this interview, Professor Richard Watson explains how the capital asymmetry framework applies to aged care and what it means for strategic planning in a consolidating sector. His recent paper in Business Horizons introduces the capital asymmetry framework through case studies spanning Ford, GM, Toyota, BMW, Tesla, and BYD. He's now exploring how this lens applies to the transformation of aged care.

Read the Full Paper

Reading Professor Watson’s article, I was reminded of a Mondrian grid; ordered lines, unequal blocks, and balance achieved through imbalance.

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Understanding Capital Asymmetry

But first, let's start with a brief overview of capital creation. Every organisation invests resources to create future value. For example, when an organisation supports its staff in gaining relevant qualifications, it increases its human capital. It anticipates that higher-quality human capital will lead to better decisions and higher productivity. Every organisation has a capital creation recipe, though it may not be stated explicitly.
 
Professor Watson identifies six types of capital that organisations (across all industries) can develop:

Capital	Description	Asymmetry Foundations
Economic	Financial, physical, manufactured resources, and revenue streams	Control of assets that provide exceptional economic scale or scope
Human	Skills, knowledge, and abilities of a workforce	A highly talented, skilled, and motivated workforce
Natural	Rights to use or extract natural resources	Very fertile land in a suitable climate; accessible, high-yielding mineral deposits
Organisational	Institutionalised knowledge and codified experience (software, databases, routines, patents, manuals, structures)	Valuable patents or trademarks; exclusive data sets or proprietary algorithms
Social	The ability to benefit from social connections	Influential connections enabling exclusive access to vital capital; exceptionally loyal customers
Symbolic	Organisational reputation, image, brands, and ranking	A highly preferred brand; reputation for quality, honesty, and customer service

Capital asymmetry exists when an organisation develops an integrated set of capital that competitors cannot easily replicate. This typically results in sustained market share gains and higher margins.

Toyota provides a clear example. Its lifetime employment policy and investment in staff training (human capital) enabled it to manufacture high-quality cars (economic capital) at competitive prices for decades; a human capital asymmetry that reshaped the global automotive industry. That advantage is now being challenged by Chinese EV manufacturers who've built different asymmetries through massive R&D teams and vertical integration.

The question for aged care providers: which type of capital asymmetry are you building?

Professor Rick Watson running a workshop at Swarovski HQ near Innsbruck, Austria

Q&A with Professor Rick Watson

Q1: Professor, you've studied how companies like Toyota and BYD built a competitive advantage through different combinations of capital. For someone running an aged care provider in Australia, what should their capital creation recipe prioritise?
 
Aged care organisations, like any other business, need to create capital to remain viable. Aged care's capital creation recipe is quite complex. Primarily, I assess that its focus should be on human capital — aged care recipients, their families and loved ones, and staff.
First, ensure that clients receive quality care and medical attention, and that they engage socially. Second, continually allay the anxiety of clients' families by reassuring them that their care expectations are being met. Third, ensure staff are appropriately trained, supported, rewarded, and motivated.

Successful management of these three dimensions of human capital is central to creating a capital asymmetry.
 
 
Q2: You identify six types of capital. In aged care specifically, how do organisational capital (systems, processes, data) and symbolic capital (reputation, brand trust) actually drive business outcomes?

Organisational capital determines staff productivity and care quality. Processes should be designed to minimise staff's secondary responsibilities, such as record-keeping, creating more time for direct care. Timely data are critical for care quality, especially for a population that often has multiple health problems.

Companies that get the basics right — caring staff and efficient processes — will build social capital, which attracts clients directly or via their families and friends. Symbolic capital is created by building a reputation for exceptional care, which can support higher fees. In brief, social capital gets customers, and symbolic capital gets a price premium.
 
Q3: Natural capital — access to land, location advantages, green space — doesn't come up much in aged care conversations. But you argue that parks and outdoor environments are genuine assets. What's the connection?
 
There is considerable evidence that access to parks and green spaces (natural capital) improves mental and physical health. Fortunately, I live next to a large park in Melbourne, and I get some of my best ideas on my daily walk!

Take this as an example – one of the healthiest US cities is Minneapolis, and its many readily accessible parks are identified as a key factor. My family lived in Minneapolis for three years, where the average January maximum is -5°C. When at school, our kids were required to go outside during recess, unless there was a blizzard. Minnesotans are educated to enjoy healthy outdoor recreation.

For aged care facilities, proximity to quality green space — or the ability to create gardens on-site — can be a genuine differentiator for residents and families.
 
Q4: Your automotive cases show that different eras were dominated by different types of capital — economic (Ford), organisational (GM), human (Toyota). Do you think aged care is going through a similar transition right now? If so, what type of capital is defining this moment?
 
Yes, I believe aged care is at a transition point. The next wave of competitive advantage will likely come from organisational capital — specifically, how providers use robots and AI to improve care quality and efficiency.

We are currently researching how robots and AI can improve care. Advances in sensing technology will enable robots to measure a care recipient's status. For example, a robot with an artificial nose can assess a person's breath to detect chemicals that indicate health problems. It can also record speech, chronicle changes in vital signs and behaviour. Essentially, robots will collect data, and AI will analyse it to detect changes in a client's health and behaviour.

Aged care facilities that lead in learning how to implement robots and AI can create an organisational asymmetry — potentially improving staff recruitment and retention whilst attracting a price premium.

Q5: Most aged care operators are reacting to immediate pressures — workforce shortages, rising costs, and regulatory changes. How do they step back and actually assess where to build capital asymmetry when they're just trying to keep being operational?
 
Immediate problems dominate daily decision-making and determine short-term success. Thinking strategically should also be a daily practice, but it needs about 10-15 minutes of undistracted time. I advocate a phone-free and tree-immersion walk around the neighbourhood, or in a nearby park. If you must take a phone, the only use should be to capture your thoughts for the future of your business.

Capital, in essence, is foregoing current consumption in anticipation of future gains. The first farmers, instead of eating all their grain, put aside some to sow for next year's crop. Leaders must set aside thinking time to contemplate the future. Thinking enhances your human capital.

A sample capital asymmetry analysis grid

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Free Asymmetry Analysis Grid
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Q6: You introduce a capital asymmetry analysis grid in your paper (shown above) — a tool for visually mapping competitive position across the six capitals. How should an aged care provider approach using it?

An asymmetry analysis compares a firm with its major competitors across different types of capital. It's a prerequisite to identifying a potential strategy for achieving a capital asymmetry or overcoming an asymmetry disadvantage.

I recommend that an asymmetry analysis be done collectively by the top management team with the aid of a facilitator. It's an opportunity to align the team's understanding of the firm's capital creation recipe and enable a united future direction.

By the way, I'm available to facilitate asymmetry analyses for aged care providers in Australia as part of our research — my only charge is travel costs. (See details at the end of this article.)
 
Q7: One of the insights from your automotive cases is that imitating a competitor's capital asymmetry doesn't usually work — the first mover gains an advantage that's hard to erode. What does that mean for aged care providers who are trying to catch up to better-resourced competitors?

If you're behind better-resourced competitors, trying to copy their asymmetry won't work. Our research indicates that a firm's capital asymmetry persists until an innovative capital-creation model emerges — as we're seeing with BYD and Chinese auto manufacturers disrupting traditional car companies.

I recommend that aged care providers conduct an annual asymmetry analysis to track their main competitors and identify opportunities to gradually close gaps or find gaps they can fill. At the same time, they should scan for innovations that could set them apart.
Our recent analysis suggests that knowledge capital asymmetries are the next stage. These are created by leveraging experts (human capital) with data and software (organisational capital) — essentially, turning workforce expertise into scalable, data-driven systems.
 
Q8: Looking ahead, what's at stake for aged care providers who don't think strategically about where to build competitive advantage?

As Lewis Carroll observed in Alice in Wonderland, the Red Queen had to keep running to stay in the same place. Survival requires constantly adapting and evolving to keep pace with ever-evolving competitors. Organisations that don’t plan for a different future will slip behind until they lose their place in the industry. In a consolidating sector like aged care, that means acquisition or exit.
 
 
→ Work with Professor Watson: Asymmetry analysis sessions for aged care providers

As part of his ongoing research into capital asymmetry in aged care, Professor Watson is offering to facilitate strategic analysis sessions for Australian providers.

What you'll get: A facilitated capital asymmetry analysis session with your top management team. This collaborative process helps you:

• Assess your position relative to major competitors across all six types of capital
• Identify potential sources of competitive advantage
• Align your leadership team on your organisation's capital creation strategy

 
The offer:

• Melbourne-based providers: No cost
• Outside Melbourne: Travel costs only

This is an opportunity to apply the capital asymmetry framework directly to your organisation with guidance from the researcher who developed it. Professor Watson's research benefits from understanding how aged care providers think about competitive strategy, creating mutual value.

To express interest: Contact Professor Watson directly by email

The Red Queen Running illustration by John Tenniel from the first edition of Through The Looking Glass, 1872

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