What is Intellectual Capital?

Intellectual Capital is simply the sum total of all the Intangible Assets (intangibles) in an organization. It is commonly sub-classified into Human Capital, Structural Capital and Relational Capital.

Human Capital

We have often heard and read the phrase "People are our most important assets". People Assets refer to the Human Capital of the organization.

It is the sum total of knowledge, skills, competencies, ideas, energies, motivation, etc that is resident in the minds of the employees of the Company. This capital leads to the creation and/or revamp of new products and services that attracts Customers, drives revenues and stimulates long term growth of the Company.

Structural Capital

Structural Capital is the knowledge of an organization that does not go home at night. In other words, it is company property that is deeply entrenched in the culture of the company by way of documents, systems, processes, databases, publications, manuals, organization structure, etc.

It is distinct from Human Capital in that it can be easily reproduced and shared. However, ownership of it can be legally protected by way of patents and trade secret and copyright laws.

Relational Capital

Relational capital is the value of an organizations's relationships with the people and businesses with whom it trades, such as its Customers, Suppliers and Partners. This is the most valuable form of Intellectual Capital because Customers pay the bills, which directly contribute to revenues.

However, relational capital is highly intangible in nature, which is the reason why Companies spend enormous amounts of marketing money to encapsulate this form of Intellectual Capital into a "Brand".

Whichever way we cut it, experts agree that Intellectual Capital is clearly the new growth driver of the Knowledge Economy. Just as machines replaced human and animal labour during the Industrial revolution, in the Knowledge Economy intelligence and brainpower is replacing energy, machines and muscle. In one way or another, we are all knowledge workers now, working for knowledge companies. Obviously then, businesses that will survive and grow during the Knowledge revolution are the ones that will best manage their Knowledge i.e. their Intellectual Capital.

It makes eminent sense therefore to understand exactly what Is Intellectual Capital, and how it can be measured and managed to drive sustainable Growth. Attainix Consulting was formed explicitly to help you in this process.