Capital used to be viewed in physical, tangible terms – factories, machinery and money. Now the quest is on for greater understanding of the most intangible, elusive, mobile and important asset of all: intellectual capital.
Intellectual capital can be crudely described as the collective brainpower of an organisation. The switch from physical assets to intellectual assets – brawn to brain – as the source of wealth creation has been underway in the developed economies for some time. As an advertisement for Deutsche Bank put it: “Ideas are capital. The rest is just money”. Among the most influential chroniclers of this shift is the Fortune columnist Thomas A Stewart, author of The Wealth of Knowledge and Intellectual Capital: the New Wealth of Organizations.
Stewart claims that the changes taking place are as significant as the Industrial Revolution. “Knowledge has become the most important factor in economic life. It is the chief ingredient of what we buy and sell, the raw material with which we work. Intellectual capital – not natural resources, machinery or even financial capital – has become the one indispensable asset of corporations,” he says.
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