Cambridge AS A Level Business Studies/ ZIMSEC Advanced Level Business Studies/ Business Enterprise Skills Notes: Intellectual Property

  • Capital is one of the four factors of production
  • Intellectual capital is part of capital
  • To reiterate, creating a business (enterprise) involves combining the four factors of production
  • These factors are also known as resources
  • These resources include capital, land, labour and entrepreneurship
  • It is important to note that the word capital does have many meanings
  • When we are using it in the context of resources we are referring to “equipment” or all the man-made aids to production
  • This includes things like tractors, robots, other machinery, money used to start a business etc
  • These days an important form of capital is in the form of intellectual capital
  • Intellectual capital can be defined as the collective knowledge and intelligence of the individuals in an organization or society
  • This knowledge can be used to:
    • Produce and enhance wealth
    • Gain a competitive advantage over your competitors
    • Spot new business opportunities
    • Solve emerging and existing problems
  • Sometimes intellectual capital is used to develop patentable ideas
  • Those who wish to use these ideas are then required to pay royalties if they want to use them
  • For example companies such as ARM do not actually produce commercial products
  • They focus on Research and Development and patent their ideas
  • Companies from all over the world then produce computer processors based on ARM’s techniques
  • Sometimes intellectual capital is of such importance that it becomes a state secret
  • For example, Boeing and Lockheed Martin produce fighter planes and missiles for the US government using classified intellectual capital
  • Another example of the manifestation of intellectual property are fashion designs

To access more topics go to the Advanced Level Business Studies page

To access more topics go to the ZIMSEC Business Enterprise and Skills page

To access more topics go to the Cambridge AS A Level Business Studies page

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