Intangible Capital is the New Factory

The core of the tangible economy is the factory. Simply put, a factory is a building where production equipment converts raw material into finished goods. Companies make their money by selling these finished goods. The story of the tangible economy is the story of organizing and running these factories.

The modern knowledge business can also be understood as a factory, a place where the knowledge raw materials get put to work. This factory is where you create value for customers and make money. The story of the intangible economy is the story of organizing and running the knowledge factory in combination with physical processes.

The combination of all the intangibles in an organization is intangible capital (IC), sometimes also called intellectual capital. We see IC as a system which is what led us to the creation of the concept of the knowledge factory. By getting you to think of your knowledge assets—your intangible capital—as a factory, we want to get inside your head and change the way you think about your business—hopefully forever.

Don’t think about and manage human, relationship and structural capital as separate components. Manage them as a system. Think of yourself as head of the knowledge factory of your team, your division, your organization. Maximize the effectiveness of each by putting them to work in a powerful system that can’t be stopped.

Adapted from Intangible Capital: Putting Knowledge to Work in the 21st Century Organization by Mary Adams and Michael Oleksak.