Measuring and Managing Intellectual Capital for both Development and Protection

Measuring and Managing Intellectual Capital for both Development and Protection

G. Scott Erickson (Ithaca College, USA) and Helen N. Rothberg (Marist College, USA)
DOI: 10.4018/978-1-60960-054-9.ch012


This chapter considers the strategic management of intellectual capital, balancing the need to develop knowledge assets with the need to protect them. In making more strategic decisions, metrics on the level of intellectual capital and degree of knowledge management necessary to compete in an industry are required, as are those on the threat from competitive intelligence activity. The authors develop the case for appropriate metrics that accomplish these purposes, noting both potential and limitations. The authors also consider alternatives, additional data that could contribute to the usefulness and understanding of the core metrics, and provide suggestions for further research.
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As this chapter blends concepts from several different but related fields, some definitions are probably in order. For the purposes of this chapter, we employ the following terminology:

  • Intellectual capital refers to the stock of knowledge assets in the organization. These will be defined more precisely in the discussion, but include the firm’s intangible assets. In addition, we include phenomena such as data and information that typically don’t rise to the level of “knowledge” in some applications. As they are useful, informative, and have potential to become “knowledge”, they are included as knowledge assets or intellectual capital in this chapter.

  • Knowledge management is the practice of administering this intellectual capital. Most KM applications seek to increase the stock of IC. The field of KM includes numerous tools for better management and growth of knowledge assets, from simple apprenticeship programs to massive IT installations for codifying knowledge and/or installing expert identification systems. KM can also grow IC by extending the system to include more participants, particularly by gathering from and sharing with collaborators (usually, again, through IT systems).

  • Competitive intelligence (CI) has to do with organized efforts by firms to uncover competitors’ proprietary knowledge assets and other pertinent information, then subjecting it to analysis, allowing better decision-making. Although CI has aspects of knowledge management in it (gathering and analyzing knowledge assets related to a competitor), we are more concerning with the threat it poses to firms managing their own knowledge. In other words, we are looking at the number and level of CI activities arrayed against an organization.

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