Smart Intangible Knowledge Assets Valuation

Intellectual capital represents the intangible resources of wealth creation. Although there is no one definition of this concept, it is widely accepted that it can be split into human, structural and relational capital. Human capital refers to knowledge that resides in people; structural capital refers to knowledge that resides in the organization and technology; and relational capital refers to knowledge that resides in the relations with clients and stakeholders in general. Several models of intellectual capital models were developed from 1992 to 1998. These models work by managing a set of indicators which are part of the chosen intellectual capital model. Then again, the OECD has confirmed the advancement of knowledge-based economies, and intellectual capital looks to be very interesting as a field capable of explaining the value of knowledge in these growing knowledge-based economies. A problem arises, however, when a company decides to valuate its intellectual capital according to one of the above intellectual capital models. What happens is that existing intellectual capital models are designed to gather a set of indicators that per se are linked neither to the company's intangible knowledge assets nor to its business goals. So, how can intellectual capital really be used to valuate the knowledge intangible assets of a company? How can intellectual capital be smart? These are the questions that we address in this paper, illustrated by an example of a company smartly deploying intellectual capital as a tool for managing intangible knowledge assets.