Knowledge Asset Management 

Knowledge Asset Management 2024

The effective management of knowledge assets is the key responsibility of leadership and management for the 21st Century

As a result of significant international developments during 2023, we can say, at last, that it is now becoming mandatory for many organisations, public and private, to manage their knowledge assets. Knowledge assets are high value knowledge driven people, high value knowledge driven processes and technologies, high value intellectual property, rights, brands and digital knowledge assets. Effective knowledge asset management cultivates a transformative mindset and high value knowledge driven culture.  Furthermore, those organisations that manage their knowledge assets wisely, will be leaders in the 21st Century knowledge driven economies, institutions, and professions around the world. 

This will be of special interest to senior policy makers and public servants in all capacities, the legal and accounting professions, economists, politicians, knowledge management and innovation practitioners, IT professionals, learning and organisational renewal consultants, and those interested in better ways to align their organisations to the United Nations Sustainable Development Goals.

Why Knowledge Asset Management?

In December 2021, after an extensive period of development and consultation, HM Government, United Kingdom, published “The Rose Book: guidance on knowledge asset management in government”. It contains some key principles, most notably:

•       “Knowledge assets are valuable public assets, critical to the effective delivery of public services. It is the responsibility of every public servant to manage them in order to ensure that this value is maximised and not lost or underutilised.

•       All public sector organisations should have a strategy in place to support the effective management of knowledge assets. This will include measures to:

§  Identify knowledge assets.

§  Consider and execute appropriate protection of knowledge assets.

§  Support exploitation of knowledge assets.

•       Knowledge Assets can have considerable value and impact beyond their original purpose and exploiting this is part of good asset management. This value can be social, economic, and financial, and is often a combination of these.

These principles will inform the development of an organisations knowledge asset management strategy.”

But knowledge asset management is not just a fiduciary duty for the public sector servants to improve citizens value (managing public money). It is the fiduciary duty of every Director of private sector organisations to manage all the key assets on behalf of customers, employees, shareholders, community and, indeed all key stakeholders.

During 2020/1, the Securities and Exchange Commission USA issued a regulation making it mandatory for public listed companies to report and disclose human capital as well as mandatory financial reporting. Deutsche Bank in Germany were one of the first organisations to announce their compliance.  And, today, the Environmental, Social and Governance framework (ESG) has become a very important investment tool from social, economic, and financial perspectives.

The International Standards Organisation (ISO), Geneva, have now published, at least, global standards for asset management (2014), knowledge management (2018) guidelines for internal and external human capital (2018) innovation management (2020) quality management guidelines for competence management and people development (2019).

At COP 26 2021 United Nations Climate Change Conference, the International Financial Reporting Standards Foundation (IFRC) announced the merger of the Sustainability and Accounting Standards Board with Value Reporting institutions. Simply put, our established accounting systems and standards have, and are, serving us well for the industrial economy based on established industrial economic theory, but they are simply unfit for purpose today for the knowledge driven economy. We urgently need agreement on a new knowledge economic theory and the new instruments required to measure intangible, intellectual, knowledge assets and knowledge capital.

What is Knowledge Asset Management?

In very broad terms, we put to you that the world today desperately needs better ways to create, manage and apply its collective knowledge and knowledge assets and innovate than ever before in history, to solve major problems for humanity and create the best opportunities for development and growth. The principles, strategies and tools for effective collective and systematic knowledge asset management can now be applied by individuals, teams, organisations, large and small, nations, regions and globally. We also put to you that the world passionately wants better ways to create, manage and apply its collective knowledge assets and innovate, than ever before in history - to strive towards creating new major benefits and increased quality of life for all our citizens to be able to thrive! So, we are talking about a management discipline to better identify, retain, develop, share and/or protect, capitalise on and report on, our knowledge assets alongside our traditional tangible and financial assets.

The absurd reality today is that most organisations around the world today have more knowledge assets that are significantly higher in value than traditional physical assets, and yet, that value is still not reflected properly, and in a meaningful way, in traditional accounting systems. We will gain enormous benefits when we incorporate fresh new perspectives and make far more meaningful decisions when we incorporate knowledge accounting systems into our new ways of reporting value. 

Ron Young

CEO / CKO

Knowledge Associates Cambridge, UK