Page 4 - Intellectual Capitail Management

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The importance of intellectual capital as an enabler of future performance is

now generally accepted among executives across the world. Most organizations,

however, still lack practical skills, tools, and techniques to identify, measure, and manage

this vital performance driver.

2.2 Several factors that led to the importance of intellectual capital:

- The changing legal environment. Newly created laws protect intellectual

property, patents, licenses, copyrights and other intangible elements that

require high intellectual capital.

- The spread of Internet and information technologies. High-speed Internet

use is associated with the lightning spread of information. On the production

era, the main source of the value was material resources, but on an
information era, information is more valuable than tangible assets.

- The impact of intellectual capital. Intellectual capital has the ability to
increase company’s profitability. It enables companies to develop new

products and services, new business processes and organizational forms.
Company converts its resources from tangible to intangible: knowledge and

information.

2.3 Importance of Intellectual Capital

- Knowledge based companies: Regardless the field or sector a company is operating,

nowadays the only difference between competitors is that how fast and efficiently can

they renew themselves (from organizational, product line, technological, production and

marketing point of view). Most of market leading firms cannot be characterized any

longer as productive or service companies. They try to provide every dimension of

business what their customers might demand. They are searching for new opportunities

at niches they have not dealt with yet. All of these innovations and ideas are based on the

intellectual capital a firm holds inside its boundaries.

- Intangible assets: by the year 2010 intangible assets constitute 60-75% of corporate

value in average. This means that less than half of corporate principal can be counted,

By : Enas Mekki Managing Intellectual & Human Capital