Intellectual Capital

What Is Intellectual Capital?

Intellectual capital is the value of a company's employee information, skills, business training, or any proprietary data that might give the company a competitive advantage.

Intellectual capital is viewed as an asset, and can extensively be defined as the assortment of all educational resources a company has at its disposal that can be utilized to drive profits, gain new customers, make new products, or in any case work on the business. It is the sum of employee skill, organizational processes, and different intangibles that add to a company's main concern.

A portion of the subsets of intellectual capital incorporate human capital, data capital, brand awareness, and informative capital.

Grasping Intellectual Capital

Intellectual capital is a business asset, despite the fact that measuring it is an extremely subjective task. As an asset, it isn't set up for the balance sheet as "intellectual capital"; all things considered, to the degree conceivable, it is integrated into intellectual property (as part of intangibles and goodwill on the balance sheet), which in itself is hard to measure.

Companies spend a lot of time and resources creating management skill and training their employees in business-specific areas to add to the "intellectual ability," as it were, of their enterprise. This capital employed to improve intellectual capital gives a return to the company, however hard to measure, yet something that can contribute toward many years' worth of business value.

Measuring Intellectual Capital

Different methods exist to measure intellectual capital yet there is no consistency or uniform standard accepted in the industry. For instance, the balanced scorecard, which is an industry performance metric, measures four points of view of an employee as part of its efforts to evaluate intellectual capital. The viewpoints are financial, customer, internal processes, and organization capacity.

Then again, the Danish company Skandia thinks about the transformation of human capital into structural capital as the mission of intellectual capital. The company has planned a house-like structure with financial concentration as the rooftop, customer concentration and interaction as the walls, human concentration as the spirit, and renewable and development center as the platform to measure intellectual capital.

In view of the undefined nature and characterizing elements of intellectual capital, it is likewise alluded to as immaterial assets and environment.

Types of Intellectual Capital

Intellectual capital is generally usually broken down into three categories: human capital, relationship capital, and structural capital.

Human capital incorporates the entirety of the information and experience of employees inside an organization. It comprises of their education, life experiences, and work experience. It tends to be increased by giving training.

Relationship capital incorporates each of the relationships that an organization has, which incorporate its employees, its providers, its customers, its [shareholders](/shareholder, etc.

Structural capital alludes to the core conviction system of an organization, for example, its mission statement, company policies, work culture, and its organizational structure.

Instances of Intellectual Capital

Instances of intellectual capital incorporate the information that a factory line worker has developed over numerous years, a specific approach to marketing a product, a method to cut downtime on a critical research project, or a puzzling, secret formula (e.g., Coca-Cola soft beverage). A company can likewise support its intellectual capital by hiring qualified people and cycle specialists who add to its main concern.

For instance, a repairman moves on from technical school and starts work at an automobile manufacturer. Their intellectual capital comprises of the information they learned at school. Following one year at work, their intellectual capital has increased by the experience they have gained through their job and the specific application of their insight. Following two years, the repairman is enrolled in a training program that spotlights on new technology and increased proficiency. The specialist's, and hence the company's, intellectual capital has increased further.

As technology and handle improvements become even more a separating factor inside modern companies, intellectual capital turns into a greater factor in achieving outcome in a competitive marketplace.

Features

• Intellectual capital alludes to the immaterial assets that add to a company's primary concern. These assets incorporate the mastery of employees, organizational processes, and the sum of information held inside the organization.
• There is no standard method to measure intellectual capital, and standards for measurement shift across organizations.
• Businesses can increase intellectual capital by hiring better employees, directing training programs for employees, and growing new licenses.
• Intellectual capital incorporates human capital, data capital, brand awareness, and informative capital.