Intellectual capital is the combined knowledge of employees within an organization (Intellectual, 2013). This knowledge is to add value to the organization in ways such as increase profits, provide products or services to customers, gain competitive advantage, improve processes, or other types of capital. This paper will show five different types of intellectual capital that adds value to an organization. It will provide examples of each intellectual capital, whether that capital is identifiable or unidentifiable as an asset, and how each provides value to the organization.
The first intellectual capital to discuss is customer capital. Customer capital is the relationship the organization builds and …show more content…
Examples of intellectual property are formulas, receipts, inventions, software, and brand names. For example, a secret receipt is very valuable to an organization because it is a blueprint for a product it sells to its customers. The commercial for Bushes Baked Beans talks directly about how important its secret receipt is to its product and therefore its business. Some intellectual property can be identifiable, such as secret receipts because it can be sold for money and tractable in business financials as revenue. Intellectual property is very valuable to organizations for its potential to create new products and earn revenue and volume growth.
The last intellectual capital to discuss is research and development. Research and development combines both basic and applied research to develop new products, improve services, discover new solutions (R&D, 2013). Areas that represent research and development are researchers, scientists, and information technology specialists (Berry, 2004). Research and development are not identifiable because there is no market value and cannot be sold. It is very important in today’s organizations because it drives new innovative ideas that can help an organization improve its competitive advantage and generate revenue growth adding value to the organization.