Intellectual Capital

Topics: Capital, Capital accumulation, Balance sheet Pages: 4 (858 words) Published: May 11, 2013
Intellectual capital-Tomorrow’s assets, today’s challenge

Executive summary
This report has the following objectives: Defining the intellectual capital; exploring how to change the tacit knowledge into intellectual knowledge; suggesting how to turn intellectual capital into revenue; highlighting the intellectual management in enterprises. With increasing emphasis on that intellectual property is the greatest asset, this report also investigates the ways to protect intellectual capital in company.

Key words: intellectual capital; tacit knowledge; intellectual management

The most important assets companies own today are often not tangible goods, equipment, financial capital, or market share, but the intangibles: patents, the knowledge of workers, and the information about customers and channels and past experience that a company has in its institutional memory. (Thomas A. Stewart’s)

1 Defining the intellectual capital

* SEC Commissioner Wallman describes intellectual capital as assets currently valued at zero on the balance sheet, including items such as the following: Human brainpower
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Assets booked at historical costs that have appreciated over time into something of much greater value. * Annie Brooking (a consultant and author of Intellectual Capital: Core Asset for the Third Millennium Enterprise) defines intellectual capital as the “combined intangible assets which enable the company to function.” In other words, she sees an enterprise as the sum of its tangible assets and its intellectual capital, as shown in the following formula: Enterprise = Tangible Assets + Intellectual Capital

* Leif Edvinsson (Corporate Director of Intellectual Capital at the Swedish corporation Skandia and co-author of Intellectual Capital: Realizing Your Company’s True Value by Finding its Hidden Brainpower) equates intellectual capital with the sum of human capital and...
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