What is Intangible Capital?

Thatwasthen 1

Thisisnow 2

It’s a seismic shiftAgricultural Era  Industrial Era  Knowledge Era 3

Understanding the shift Industrial  Knowledge Era Tangible  Intangible Assets Factory  Knowledge Factory 4

It’s been fueled by investmenthttp://www.conference-board.org/data/intangibles/ 5

Where has the money gone?…to build knowledge assets:• In computers • In designs,• In workforces products• In processes • In networks • In brands 6

Investment created new value “Intangible,” off-balance sheet portion of corporate valueSource: Ocean Tomo 7

Shift happened economy-wide Intangible Value as a % of Total Market Capitalization by Sector 100% 90% 80% 70% 60% 1975 50% 2005 40% 30% 20% 10% 0% s les ner gy als rial ry ar e ials ces gy ties E a teri d ust tion a r Stap lth C in anc Servi olo U tili M In cr e me He a F s chn Dis o ns u tion Te er C u ni ca tion s um ma Co n mm Inf or l eco Te 8

For now, holding at +/- 80% 9

This isabout therise of anew kind ofeconomicasset 10

Whatis IC? 11

Human Capital• Employees: – Competencies – Experience – Loyalty• Management – Industry experience – Managerial expertise 12

StructuralCapital• Processes/IT (the heart of modern business)• Technology/IP – Data, stored information and knowledge – Own product/service designs and knowledge – Intellectual property (patents, trademarks, copyrights, trade secrets)• Sales and marketing processes 13

RelationshipCapital• Customers• External partners (suppliers, outsourcing partners, regulators, communities, press)• Brand and Reputation (the new bottom line) 14

StrategicCapital• Business model – How the knowledge factory fits together• External factors: – Industry – Economy – Competition – Globalization – Regulation 15

IC Management -Measure -Manage -Monetize 16

Benefits of IC Management• Optimized performance Healthcare co grew revenues with lower headcount• Increased innovation High-end consulting firm doubled in size• Higher valuation Tech firm sold at premium to the market• Great reputation Engineering firm doubled key hourly rates 17

Uncover the value of your hidden assetsWeb TrekConsulting.comBook IntangibleCapitalBook.comBlog SmarterCompaniesBlog.comCommunity ICKnowledgeCenter.com Mary Adams 781-729-9650 adams@i-capitaladvisors.com 18

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What is Intangible Capital?

by Mary Adams on Nov 01, 2011

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What is Intangible Capital? — Presentation Transcript