Question

In: Economics

significant research about intellectual capital

significant research about intellectual capital

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Expert Solution

Intellectual capital is a business asset as it is a somewhat subjective activity to quantify. This asset to a firm is not booked on the balance sheet as "intellectual capital"; instead, to the extent possible, it is integrated into intellectual property, which in itself is difficult to measure. Enterprises spend a lot of time and resources developing management expertise and training their employees in business-specific areas to add to their enterprise's 'mental capacity,' so to speak. This capital employed to enhance intellectual capital provides a return to the company, though difficult to quantify, but something that can contribute toward many years ' worth of business value.

Types of Intellectual capital are:

Human Capital refers to the skills / competences, training and education, and the experience and value characteristics of the workforce of an organization that are in the minds of individuals: knowledge , skills, competencies, experience, know-how, skills, expertise of the organization's human members.

Relational capital All relationships a company has with outside subjects such as suppliers , partners, customers. External capital involves customer / supplier partnerships, brand names, trademarks, and prestige.

Structural Capital what is left for the night procedures, computer systems , databases, laws, intellectual property, community, etc. after workers go home. Therefore information is rooted in the systems and processes of organization.

During the second half of the twentieth century the essence of business activity in the US changed drastically. Jobs increased dramatically in the service-producing industries. At the same time, there has been a fall in manufacturing, farming, construction and other goods-producing jobs. The U.S. economy has undergone a fundamental shift in the way the work force is employed. Although earlier the most important enterprises were manufacturing enterprises, with the largest portion of the labor force engaged in the manufacture of goods, in the U.S. economy of the twenty-first century, employment in service enterprises exceeds that of employment in commodity production.

Limitations to financial reporting have led to efforts to measure intellectual capital indirectly outside of the financial statements. Sometimes, such measures accompany the financial statements in stockholders' reports. These non-financial measures include information on items such as percentage of revenue per employee, employees who have contact with customers, satisfied customers, cost of research and development, continuing education and training per employee, turnover of employees and satisfaction of employees. The Balanced Scorecard is one of the best-known performance assessment methods that implies the presence of intellectual capital


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