Intellectual Capital

AAA

DEFINITION of 'Intellectual Capital'

The value of a company or organization's employee knowledge, business training and any proprietary information that may provide the company with a competitive advantage. Intellectual capital is considered an asset, and can broadly be defined as the collection of all informational resources a company has at its disposal that can be used to drive profits, gain new customers, create new products, or otherwise improve the business.

Some of the subsets of intellectual capital include human capital, information capital, brand awareness and instructional capital.

INVESTOPEDIA EXPLAINS 'Intellectual Capital'

Intellectual capital is a real business asset, although measuring it is a very subjective task. Companies spend millions annually training their employees in business-specific topics and otherwise paying for increased competence in their staff. This capital employed provides a return to the company, one that can contribute toward many years' worth of business value.

As technology and process improvements become more of a differentiating factor within modern companies, intellectual capital is likely to become an even stronger force in the marketplace.

RELATED TERMS
  1. Goodwill

    An account that can be found in the assets portion of a company's ...
  2. Chief Technology Officer - CTO

    An executive who is responsible for the management of an organization's ...
  3. Baptism by Fire

    A phrase originating from Europe that describes an employee that ...
  4. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  5. Brand Awareness

    The likelihood that consumers recognize the existence and availability ...
  6. Intellectual Property

    A broad categorical description for the set of intangibles owned ...
Related Articles
  1. Evaluating A Company's Capital Structure
    Bonds & Fixed Income

    Evaluating A Company's Capital Structure

  2. Can You Count On Goodwill?
    Personal Finance

    Can You Count On Goodwill?

  3. Financial Efficiency: The Analyst's ...
    Professionals

    Financial Efficiency: The Analyst's ...

  4. Intangible Assets Provide Real Value ...
    Markets

    Intangible Assets Provide Real Value ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center