Knowledge Management and Innovations activate Enterprises

In a company its financial results obtained from innovations are a direct indication of the success of a business. However, in recent years, financial indicators and corporate balance sheets have begun to be supplemented by the concepts of knowledge management, intellectual assets and intellectual capital, and even personnel balance sheets. Intellectual capital is part of an enterprise’s intangible assets. Its quantum may be estimated as the difference between the enterprise’s market value or acquisition price and its book value.

A key component of the intellectual capital is the so-called organisational capital. Among others, it includes:

  • Intellectual property rights, such as patents and trademarks
  • Corporate culture
  • Trade secrets
  • ICT and information systems
  • Personnel and customers

Intellectual capital also includes human assets, such as know-how, teamwork skills and values. It is essential to manage these assetts properly.

Intellectual capital may be measured using indices such as

  • Value added per person
  • Quantity and quality of customer contacts
  • Make-over rate, or the ability to introduce new products and their share of total sales
  • Number and quality of patents

The intellectual capital of an enterprise and the different types of intellectual property rights are often combined to add value to the product at the commercialisation phase. Industrial products are often protected by multiple patents and have a registered trademark. In addition, the product may incorporate design characteristics, know-how that cannot be legally protected, trade secrets, and the like. All of these give additional value.

Kari Sipilä