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Human capital is a concept used by economists to designate personal attributes considered useful in the production process. It encompasses employee knowledge, skills, know-how, good health, and education. Human capital has a substantial impact on individual earnings. Research indicates that human capital investments have high economic returns throughout childhood and young adulthood.
Intellectual capital is the result of mental processes that form a set of intangible objects that can be used in economic activity and bring income to its owner (organization), covering the competencies of its people, the value relating to its relationships, and everything that is left when the employees go home, of which intellectual property (IP) is but one component. It is the sum of everything everybody in a company knows that gives it a competitive edge. The term is used in academia in an attempt to account for the value of intangible assets not listed explicitly on a company's balance sheets. On a national level, intellectual capital refers to national intangible capital (NIC).
Knowledge management (KM) is the collection of methods relating to creating, sharing, using and managing the knowledge and information of an organization. It refers to a multidisciplinary approach to achieve organizational objectives by making the best use of knowledge.
In economics, capital goods or capital are "those durable produced goods that are in turn used as productive inputs for further production" of goods and services. At the macroeconomic level, "the nation's capital stock includes buildings, equipment, software, and inventories during a given year."
The knowledge economy, or knowledge-based economy, is an economic system in which the production of goods and services is based principally on knowledge-intensive activities that contribute to advancement in technical and scientific innovation. The key element of value is the greater dependence on human capital and intellectual property as the source of innovative ideas, information and practices. Organisations are required to capitalise on this "knowledge" in their production to stimulate and deepen the business development process. There is less reliance on physical input and natural resources. A knowledge-based economy relies on the crucial role of intangible assets within the organisations' settings in facilitating modern economic growth.
An intangible asset is an asset that lacks physical substance. Examples are patents, copyright, franchises, goodwill, trademarks, and trade names, as well as software. This is in contrast to physical assets and financial assets. Intangible assets are usually very difficult to value. They suffer from typical market failures of non-rivalry and non-excludability. Today, a large part of the corporate economy consists of intangible assets.
Knowledge workers are workers whose main capital is knowledge. Examples include ICT Professionals, physicians, pharmacists, architects, engineers, scientists, design thinkers, public accountants, lawyers, editors, and academics, whose job is to "think for a living".
A value network is a graphical illustration of social and technical resources within/between organizations and how they are utilized. The nodes in a value network represent people or, more abstractly, roles. The nodes are connected by interactions that represent deliverables. These deliverables can be objects, knowledge or money. Value networks record interdependence. They account for the worth of products and services. Companies have both internal and external value networks.
Intellectual capital is the sum of all knowledge; implying that knowledge that exists at different levels both within or outside the organisation has to be taken into account for intellectual capital. The intangible nature of many knowledge products and processes, in combination with the increasing importance of their value in corporate balance sheets leads to a growing interest in management of intellectual capital. Creating, shaping and updating the stock of intellectual capital requires the formulation of a strategic vision, which blends together all three dimensions of intellectual capital within the organisational context through exploration and exploitation, measurement and disclosure. Therefore, the organisational value of intellectual capital is developed via an ongoing and emergent process focused on the capability to leverage, develop and change the dimensions. The management of intellectual capital is conceptualised as occurring via a multiple stage process, governed by an evolutionary logic. The intellectual capital management is defined as a cycle of four inter-related sets of practices: Strategic Alignment, Exploration and Exploitation, Measurement and Reporting of intellectual capitals.
Asset management is a systematic approach to the governance and realization of all value for which a group or entity is responsible. It may apply both to tangible assets and to intangible assets. Asset management is a systematic process of developing, operating, maintaining, upgrading, and disposing of assets in the most cost-effective manner.
Intangible asset finance, also known as "IP finance", is the branch of finance that uses intangible assets such as intellectual property and reputation to gain access to credit. Like other areas of finance, intangible asset finance is concerned with the interdependence of value, risk, and time.
Reputational damage is the loss to financial capital, social capital and/or market share resulting from damage to a firm's reputation. This is often measured in lost revenue, increased operating, capital or regulatory costs, or destruction of shareholder value. Ethics violations, safety issues, security issues, a lack of sustainability, poor quality, and lack of or unethical innovation can all cause reputational damage if they become known.
Relational capital is one of the three primary components of intellectual capital, and is the value inherent in a company's relationships with its customers, vendors, and other important constituencies. It also includes knowledge, capabilities, procedures and systems which are developed from relationships with external agents.
Exit planning is the preparation for the exit of an entrepreneur from his company to maximize the enterprise value of the company in a mergers and acquisitions transaction and thus his shareholder value, although other non-financial objectives may be pursued including the transition of the company to the next generation, sale to employees or management, or other altruistic, non-financial objectives. Exit planning differs from succession planning in that the later is a sub-component of exit planning, and refers to the hiring, training and retention of a successor President/CEO of the company in a planned manner. Succession Planning is but one of the many considerations when conducting exit planning. Company owners commonly do not see their company from the standpoint of a potential buyer, and thus, ignore the strategic management of the company.
Process capital is the value to an enterprise which is derived from the techniques, procedures, and programs that implement and enhance the delivery of goods and services. Process capital is one of the three components of structural capital, itself a component of intellectual capital. Process capital can be seen as the value of processes to any entity, whether for profit or not-for profit, but is most commonly used in reference to for-profit entities.
Organizational capital is the value to an enterprise which is derived from organization philosophy and systems which leverage the organization's capability in delivering goods or services.
Leif Edvinsson is a Swedish organizational theorist, Professor at the University of Lund in Sweden and consultant, known for his work on intellectual capital. and knowledge management.
National intangible capital (NIC) performance for 59 countries 2014 as measured by the ELSS (Edvinsson-Lin-Ståhle-Ståhle) methodology for measuring stock of national intangible capital, economic impacts and efficiency of NIC: Research is supported as an initiative by The New Club of Paris.
Intrapreneurial Bricolage (IB) is the pursuit of entrepreneurial endeavors, operating within a larger organization using only limited, available resources. The term combines the two concepts of intrapreneurship and bricolage. Intrapreneurship uses principles and strategies from the discipline of entrepreneurship and applies them within the confines of an organization rather than initiating new ones. Borrow from the French word for "makeshift job", bricolage is a type of art using whatever media is at hand. In the context of intrapreneurial bricolage, intrapreneurs find innovative ways to work with a scarcity of resources.
The ISO 56000 is a family of standards designed to provide a framework for organizations to implement, maintain and improve innovation management systems.
References
- ↑ Maddocks, J. & Beaney, M. 2002. See the invisible and intangible. Knowledge Management, March, 16-17.
- ↑ Khavandkar, Ehsan; Theodorakopoulos, Nick; Hart, Mark; Preston, Jude (2016). "Leading the Diffusion of Intellectual Capital Management Practices in Science Parks". Human Resource Management, Innovation and Performance (PDF). pp. 213–231. doi:10.1057/9781137465191_14. ISBN 978-1-349-56307-4. S2CID 55619748.
- ↑ Roos, J., Roos, G., Dragonetti, N. C., & Edvinsson, L. (1997). Intellectual capital. Macmillan Business.
- ↑ "Social capital, intellectual capital and the organizational advantage" (PDF). Archived from the original (PDF) on 2013-01-23. Retrieved 2019-10-23.
- ↑ Brenner, Markus; Coners, André (2010). "Process Capital as Strategic Success Factor: The Lufthansa Example". Handbook on Business Process Management 2. pp. 57–72. doi:10.1007/978-3-642-01982-1_3. ISBN 978-3-642-01981-4.
- ↑ Chen, Jin; Zhu, Zhaohui; Yuan Xie, Hong (2004). "Measuring intellectual capital: a new model and empirical study". Journal of Intellectual Capital. 5 (1): 195–212. doi:10.1108/14691930410513003.
- ↑ Edvinsson, L (1997). "Developing intellectual capital at Skandia". Long Range Planning. 30 (3): 366–373. doi:10.1016/s0024-6301(97)90248-x.
