What Is a Knowledge Asset?

A knowledge asset is an asset that is generated from an organization's experiences or innovation that can be turned into actual physical assets like wealth in the future. Some of these assets are tangible, such as copyrights or patents that are owned by a company and can be transformed into profitable products. In most cases, a knowledge asset is an intangible bit of information gleaned from a company's production processes, investment history, or work force that can be impactful when used correctly. Distilling this information into usable best practices for forming an organization and conducting business is the way that this knowledge becomes so worthwhile.

There are many companies whose worth is obvious from the numbers on their balance sheets or income reports. Few of these companies happen upon this kind of wealth by accident. They do so by using knowledge that either comes from innovative leadership or from trial and error over time. No matter the case, companies with the most useful knowledge can effectively gain a competitive advantage over its rivals. As a result, a knowledge asset can be just as important as any physical asset owned by a company.

Some examples of a knowledge asset have actual physical manifestations. A company that holds the patent for some revolutionary business product or money-saving production technique can easily turn that patent into profits. Copyrights are equally valuable, considering that they give the company that holds them exclusive rights to whatever assets they protect. Each of these documents emanate from the knowledge of their creators.

In many cases, a knowledge asset is an intangible piece of information. That information can come from the company's past experience in any numbers of areas. A company's management can learn from experience how to align its organization, streamline production, market products, serve customers, and so on. On certain occasions, the asset may come not from experience but from some sort of innovation created by someone on the company's workforce.

While a knowledge asset is undeniably valuable, the process that turns that knowledge into helpful information is just as important. A large company has to process seemingly endless bits of information from multiple sources and distill all of that into something that can help business. Knowledge assets are especially useful for a business wishing to devise best practices. Best practices are the optimum methods for conducting a business organization in every department, and the company that can trust its best practices has a huge advantage over those companies still looking for answers.