7.1 Valuing forms of knowledge assets
Value is a relative term. Value may be posited as involving the concepts of:
- A fair return or equivalent in goods, services, or money for something exchanged
- The monetary worth of something: marketable price
- Relative worth, utility, or importance
- A numerical quantity that is assigned or is determined by calculation or measurement
- Something (as a principle or quality) intrinsically valuable or desirable (Ariely, 2003:3)
Sullivan suggested economist views value as the ‘sum of benefits (or income) stretching into the future, summed and discounted to a net present value in dollars’ (2000: xxii). Value is therefore determined by its market. Knowledge Capital has value because it can contribute to current performance and the potential for future contribution. To stakeholders in the production process and shareholders that may be investing in the organisation both dimensions hold a relative value. This relative value is only realized through proof of productivity and on going strategic ability of the organisation to for instance, learn, innovate, and to seize or create new opportunities. The value of knowledge, where ever it resides in the organisation or its relationships, its structure or form is realised in terms of value only in the context of what the organisation’s ability to deploy KC (Sullivan, 2000:247).
There are two fundamental forms of knowledge asset we will study; intellectual assets and intangible assets. As depicted below (Bowles, 2003:12) these assets can be framed to hold knowledge capital value in direct relation to the available pools of knowledge capital that form overall KC.
Figure 1 Relationship of knowledge assets to pools that form overall knowledge capital
(Bowles, 2003:12)
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