38% of the United States public workforce will likely retire by 2030 (Neumark et al., 2013). Loss of organizational knowledge results in reduced skills and less productivity in the next generation of employees.
Knowledge capital is the intangible value of an organization made up of its knowledge, relationships, learned techniques, procedures, and innovations. In other words, knowledge capital is the full body of knowledge an organization possesses.
Knowledge capital is important because it reduces the odds that a company will have to reinvent the wheel each time a particular process is undertaken. This is because its employees have access to documents detailing the necessary steps, along with access to personnel who have undertaken similar activities. Even though it may not be a physical asset, knowledge capital still requires a lot of investment.
