Knowledge Capital

See: Intellectual Capital. See: Intellectual Property.

Sometimes, the things that go on inside our heads—our insecurities, our embarrassing memories, our imaginary friends—don’t hold a lot of monetary value for our employer. But sometimes they do, like when we had that great idea to restructure how we process pay applications, and ended up saving the company thousands of dollars a year. Or like that other time, when we designed a marketing campaign (and associated catchy jingle) that made our organization a household name. Our brains and the ideas that spring forth from them are assets for our company, and intangible assets like these (okay, well, technically our brain is tangible) are what we call “knowledge capital.”

More and more, developed economies are driven by knowledge capital (also called “intellectual capital”), and we’re not just talking about great ideas. All intangible assets, from trademarks to processes to secret recipes to the awesome relationships we have with our customers are considered knowledge capital, and just like physical capital, this stuff is worth money and increases the value of our organization. It’s a competitive advantage, because it’s something that can’t be easily duplicated by our competitors, and it comes in three main forms: relational, structural, and human.

Relational knowledge capital isn’t just about how we get along with our customers. It’s also about how we get along with each other and how we get along with folks licensed to use or sell our products, like franchisees. It’s all about the people aspect, while structural knowledge capital is more about our processes and procedures. It’s all the stuff that keeps our business humming like a top, whether that’s proprietary internal accounting software or the patents we own that keep any would-be competitors at bay. And human knowledge capital...that’s us, the employees. Our big ideas, our work ethic, our knowledge and expertise all make us an asset, and if we were to ditch our current employer and go work elsewhere, our knowledge capital would go with us. Along with our ferns.