1The Economy of the Intangible

The intangibles

We are immersed in an economy of the intangible; today more than ever before,

intangibles are important creators of business value and a source of competitive

advantage. [ CITATION Lea \l 9226 ]

To understand the importance of the intangibles in nowadays economy it`s

necessary to understand the meaning of the intangibles. When you think about the things

that make a company successful, the goods that come to your mind are probably those

that are physically appreciable, those that occupy a space; But there`s more than that, the

goods that aren’t physical, the intangibles, the intangibles aren’t material but suppose a

mark-up for the enterprise. An enterprise`s capital is usually divided in three groups: The

tangible capital (mentioned before), the financial capital and the intellectual capital.

Even though the intangibles are very important this century, the term isn`t new,

authors like Kaplan and Norton (1992), Edvinson (1997) and Stuart (1997) tried to

visualize this economy using the Grounded theory that basically is a systematic

methodology in the social sciences involving the construction of theories through

methodical gathering and analysis of data. Analyzing the way economy worked back

then, they established something that is now seen daily.

Intellectual capital

It was mentioned before that this asset is one of the three types of capital that an

enterprise has, it is the value of a company or organization's employee knowledge, skills,

business training or any proprietary information that may provide the company with a

competitive advantage. It can also be divided in three groups:

1. Human Capital: The employees are the ones that make an enterprise stable in

every aspect, that`s why their skills and abilities are essential for the intellectual

capital. The Human capital are those skills /competences, training and education,

and experience and value characteristics of an organization’s workforce that in the

minds of individuals.

2. Organizational capital: While studying the effectiveness of a plan, it`s important

to have an order to follow, starting with a theorization followed by exploring,

hypothesizing and clarifying the causes and effects of a decision, after doing all of

that, the development becomes the important part, testing and improving as much

as possible, having this in mind is easier to understand routines and procedures.

As Terence Conran says, "A portion of logical thinking goes along with being

orderly," This can be applied to many contexts like employees, bosses and

enterprises.

3. Relational capital: It`s external to organization and it has to do with clients and

what they expect from a product or service, it is the individual knowledge of the

channels, clients and suppliers, or the knowledge impact of the governmental or

industrial associations. Now, an enterprise may be impeccable but without its

clients it would go bankrupt.

The usage of intangibles

The term created by the authors mentioned before didn’t just stay there, the way

we measure and explain the capability that an enterprise has to use this asset, giving way

to a new perspective, using the intangibles as a business strategy, the ‘critical intangible’

and ‘commercially exploitable intangible’. Nowadays, we usually don`t consider just

value in monetary terms but also in other values incorporated into the products and

services addressed to clients and other third parties as valuable and important, we are

talking about a whole society that works for something that isn`t physical, everywhere we

are able to see clothing that is very expensive because it`s brand is known worldwide or

goodwill, patents, trademarks and copyrights, all of this things have values and are long-

term assets.

The fact that many of these don`t have an specific value, makes it harder to reflect

it`s worth. According to Mike Kappel, serial entrepreneur and CEO of Patriot Software,

the Intangible assets make up to a 84% of a business value, since it`s the main thing that

people look up to when they are about to buy a business or even when they just want

information about it.

In conclusion, a brand or enterprise rename nowadays lies almost entirely on goodwill,

brand equity, intellectual property, licensing and rights, customer lists, research and

development. And it`s crucial to define and value each of this assets for a growing

project.
Cybegraphy

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