Management of Intangible Assets : A Major Competitive Differentiator in Knowledge Economy

There is no misgiving that what differentiates superior organizations from average ones is the way they understand, manage and leverage their intangible assets. In the current era of knowledge based new economy, management of intangible assets is the major source of competitive differentiation and key determinants of competitive advantages. It's evident that many businesses in the current era operate without traditional discernible assets. Yet these companies are increasingly the main contributors of value to the economy as intangible assets drive their economic performance. This paper explains the term intangible assets and discusses various definitions of intangibles. It also explains how intangibles differ from tangible assets. Intangibles are the main performance drivers in the present transition from a traditional to a new economy. Wealth and growth in today's economy are driven primarily by intangible assets. Paper explains drivers for the growth of intangibles. Intangible assets are levers for sustainable performance and are critical for the future success of businesses. Intangibles are inadequately accounted for in the traditional financial reporting model as current accounting system was designed for an era when tangible assets were dominant in the economy. They don't show up on a balance sheet or an income statement - yet, they are the manageable and usually quantifiable drivers of enterprise value creation. The measurement, management and reporting of intangibles is the new crucial management skill. This paper emphasize the positive correlation between disclosure of intangibles and enterprise competitive differentiation. Paper also highlights cost associated with overall management of intangibles