1. How does one put a value on the value of knowledge?
2. What do you call it after you recognize that knowledge in your enterprise has value?
3. And how do you use knowledge as opposed to indiscriminately discarding it as an asset?

You probably have a good inventory of knowledge assets even though it is titled by various subtle names or categories. But in the aggregate you can call it Knowledge Capital. Putting a value on it is tricky. Traditional accounting principles or methods may not quantify it due to the fact that so much of it is intangible. However, in most business mind sets over the last 100 years, value was only thought of in terms of capital and labor. Capital assets increased the productivity of labor. So in accounting terms the productivity of the business could be measure in terms of how much productivity did the capital generate, such as return on assets or return on investments.

Since my blogging theme has so much to do with knowledge and structuring unstructured information into soft assets to facilitate your knowledge retrieval capability, it is a good idea to think about why this transformation of the Web is in your future. Contemplating the value of knowledge is the only worth while endeavor to come to grips with it.  As a business person, you probably spend more time and labor over developing and executing upon your knowledge.

You may not actually provide capital to a project unless you are a commercial real estate developer. In the traditional thinking the persons that provide capital share in its excess or surplus called profit or rent. The only possible way labor can get an increase in wage is if the capital requires some expertise or knowledge. But, those performing the labor are not entitled to rent on the knowledge they have accumulated. Labor is only paid for the time worked and may receive a slight increase or bonus from time to time.

In putting a value on knowledge and in answer to that question, in todays information age going forward to a knowledge economy, the above reasoning for the basis of valuing employees is misleading because it does not take into consideration how fast an employee has accumulated useful knowledge. A few years ago the popular business press was touting the “Knowledge Worker”. Are we there yet?

Whether one is an architect of software, office buildings, marketing or manufacturing, it all seems like labor to most of us and thankfully most of us love what we do. So, I might propose that evaluating labor is not simply that of wages these days. In any company, organization, team or collaborative projects with or for customers, the real productivity comes from knowledge capital. This means that it is the aggregated knowledge in your head from experience, useful training and company relevant experience. From this perspective, you can further evaluate what you do in your enterprise in a new context.

In the next post Part II I will touch upon identifying some knowledge assets you may not have thought about in an effort to answer the 3rd question above.