Intellectual capital

Intellectual capital is the intangible value of a business, covering its people (human capital), the value inherent in its relationships (Relational capital), and everything that is left when the employees go home(Structural capital), of which Intellectual property (IP) is but one component. The term is used in academia in an attempt to account for the value of intangible assets not listed explicitly on a company's balance sheets. A second meaning that is used in academia and was adopted in large corporations is focused on the recycling of knowledge via Knowledge management, Intellectual capital is used in the context of assessing the wealth of organizations. A metric for the value of intellectual capital is the amount by which the enterprise value of a firm exceeds its the value of its tangible (physical and financial) assets. Directly visible on corporate books is capital embodied in its physical assets and financial capital; however all three make up the value of an enterprise. Measuring the real value and the total performance of intellectual capital's components is a critical part of running a company in the knowledge economy and Information Age. Understanding the intellectual capital in an enterprise allows leveraging of its intellectual assets. For a corporation, the result will optimize its stock price.