Intellectual capital

One of the greatest challenges facing any business today is the gap between its balance sheet and its market valuation. This gap, representing the bulk of a company's true value, consists of indirect assets -organizational knowledge, customer satisfaction, product innovation, employee morale, patents, and trademarks - that never appear in its financial reports. Only in the last few years have companies and academics around the world tackled the challenge of measuring this "Intellectual Capital." And no company has taken IC measurement as far as the Swedish financial services company Skandia, which in 1995 published the world's first IC annual report. The executive who led the team, the first-ever director of Intellectual Capital, was Leif Edvinsson.