Hi and welcome to this week’s question of the week! This week the word ‘intangible’ will be covered in the following question:
What are intangible assets?
The word intangible stands for something that creates value, whether it is specific knowledge or a brand name, which cannot be touched or seen. It can be a person or a possession. Consultancy services for instance are intangible, as it has to do with knowledge rather than actual objects. Also the name of a company holds an intangible value as it would create a positive or negative reaction to people, whilst copyrights are intangible as they protect a specific work yet it in itself are nothing but text written on paper. The following are intangible assets that a company maintains to create and keep its competitive advantage.
Copyrights, Patents, Trademarks, and licenses – These are intangibles that protect a company’s name, technology, text, pictures and videos. They allow the company to protect its property so that no other company or person can use it without a fee.
Knowledge – The people that work in a company have both tacit and explicit knowledge. Tacit knowledge is knowledge that cannot be written or codified. Explicit knowledge on the other hand is knowledge that can be written down and whoever reads it would then be able to understand it fully. For instance, when learning how to drive a car, the theory exam checks explicit knowledge. The practical theory however checks the implicit knowledge on how to drive a car. Situational awareness on the road cannot be codified as the environment always changes.
In short: Intangible stands for something that cannot be seen or touched. These include both property rights such as copyrights, patents, trademarks, and licenses, and knowledge that all employees and employers have.
If you have any questions, doubts, or other examples, then please do not hesitate to leave a comment!
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