The Value of a Corporation's Intellectual Capital

Paper Summary:

This paper presents an analysis of the value of a corporation's intellectual capital. The paper discusses the impact the intellectual capital has on the success of the company and how it should be managed.

From the Paper:

" The industrial age is over. Welcome to the world of knowledge and knowledge transformation. More and more companies are packaging and selling knowledge and information and not products. What determines the solvency and the ability of a company to compete in the global economy is the value of its intellectual or knowledge capital. Knowledge has become the body of what we make, do, buy, and sell. Therefore, it is knowledge, not land, physical labor, or machines that are the capital assets required to create corporate wealth. No longer can investors and creditors review the financial statements of an organization and the "hard assets" therein to determine corporate wealth and corporate solvency. Traditional financial analysis tools taught in accounting and finance textbooks do not measure the most valuable assets of an organization. Intellectual capital is the new wealth of organizations. The most challenging and important economic task of businesses in the twentieth-first century is their ability to manage intellectual capital "identifying it, developing it, storing it, packaging and selling it, and sharing it" (Stewart, 1998). "

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