Do you Consider Intellectual Capital an Asset for your Company?

What does intellectual capital actually represent?

Intellectual capital can be defined as all the knowledge in the company owned by employees. In other words, intellectual capital is the collective knowledge that can give your business a competitive advantage.

So why should you invest in your people?

You always have to remember that people represent the most important asset in your company emphasizing the fact that if your company is a services company people represent the most powerful tool that your company has. You have to be aware that trainings and continuous investment in your people grows your overall company knowledge. People are the ones who create the intellectual capital of your company. Intellectual capital is knowledge, and knowledge will produce innovation, improvements and eventually profit.

It`s the people who can drive your business towards profit or loss, they have the power to gain new customers, create new products and improve your business. Intellectual capital is the combined value of one company’s people.

Why should you protect your work?

Intellectual capital is becoming a critical part in many companies today in order to obtain an economic growth and innovation, as the different types of intangible assets of a business are often more important and valuable than its tangible assets.

One of the main things regarding intellectual capital is to decide whether you want to protect it or make it “open source” so anyone can have access to it. There are several ways to protect your company’s work depending on the type of protection your company needs.

Which are some reasons you should do this?

** You can protect the way in which a particular idea is expressed
** You can prevent illegal transmission of your work
** You are able to decide how your protected work can be used
** When you protect your work you are making a public claim or record that you have the sole authority over a particular work
** If you protect a work you can sell it
** You will have the power to sell or transfer your creative work and make it available to people who wish to reproduce it for some purpose

Another aspect to be taken into consideration is Intellectual Property (IP) as intellectual capital is a superset of IP, meaning that a company may be able to obtain competitive advantage without IP, but it cannot obtain competitive advantage without intellectual capital.

What are the reasons in your business to use Intellectual Property rights?

** Offers protection over your IP against a competitor that could copy your products or use your innovations;
** Helps to differentiate your brands through highlighting the peculiarity of each of them – creating a strong brand identity;
** The commercial value of your company is increased;
** Through IP transactions, like licensing and franchising, a company can gain revenues and ensures that entrepreneurs get all the financial benefit from their ideas;
** New markets become available as IP rights provide a basis for business partnerships, like outsourcing, open innovation, marketing, research etc.;
** IP assets that have legal protection can be valued and leveraged to obtain financing or venture capital, enabling more money to be raised for development;
** Geographical markets are divided as in some countries IP owners can restrict goods from being transferred into another country in which they were also given IP right protection;
** Provides consumers the confidence that products are authentic and have the high-quality that they would expect;
** Encourage innovation and reward entrepreneurs for taking risks in developing new innovations.

Statistically speaking, in countries with a high-income level, intangible investments exceed tangible investments meaning that IP is important to enable a company drive economic growth and competitiveness. Innovation is one of the key driving forces, followed by economic competencies and computerized information.


Source: WIPO – World Intellectual Property Report, 2013

Economical growth of a society is determined by the sum of values that compose it, including the human resources, through their most important asset, original creation – original output.

Intellectual capital can be compared with the roots of a tree, it is a hidden value that cannot be easily visible, although it is of vital importance. According to recent financial statistics, approximately 80% of the value of a company is made up of intangible assets and only 20% being made up of tangible assets.

How important is intellectual capital for your organization? How do you deal with it? Share your thoughts and comments!

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