6.1.1 IC and KC
In this chapter evidence will be presented to establish how Knowledge Capital (KC) is composed by pools of knowledge that are composed by stocks of available capabilities. It will be shown that what we measure when determining KC and its components will revolve around knowledge assets and their capital value. Intellectual assets are a component of these knowledge assets. IC as presented by some authors only refers to intangible knowledge assets that hold value in relation to a ‘production function’ that contributes to organisational productivity and economic performance. Confusion is avoided by using KC where two attributes are present that give clear distinction to IC. Firstly, as we will see, KC is directly related to the Current Productive Capacity (economic performance) of the organisation across pools of knowledge assets (capital) in Structural (physical assets), Social (relationships), and Human (people). Secondly, KC also attributes value to the potential productive capacity of knowledge held by individual and the organisation that is not currently deployed for productive purposes. This relates to agility, absorptive capacity and other capabilities that may be deployed by the organisation to create or seize opportunities. As we will discover, this approach stresses how the capacity of the organisation as more than Current Productive Capacity or performance. It must include the ability to redeploy knowledge assets to meet future demands. KC is therefore central to current performance and also has value because it is an indicator of the organisation’s capacity to manage knowledge to seize future opportunities and create competitive advantage.
You can make your own choice on this matter to use IC interchangeably with KC. But this should only occur where the authors are precious about IC being composed by more than just intangible knowledge assets tied to current performance outcomes (Keenan & Aggestam, 2001; Rastogi, 2002; D’Egidion & Caredda, 2002:116; Skaikh, 2004).