Valuing Knowledge-Based Initiatives: What we know and what we don't know

The objective of this paper is to provide an overview of the current state of theory and practice on valuing Knowledge-Based Initiatives (KBI). Drawing on the literature concerning IT and business value, this paper summarizes what is known about valuing IT-based initiatives, discusses the specificity of KBI and outlines main challenges that continue to limit research in this area. This paper also examines how managers deal with these challenges and what metrics they use to assess knowledge value. These managerial insights are derived from interviews as well as empirical analysis of several Silicon Valley firms. This paper gives an emerging approach for valuing KBI and illustrates its implementation with a case study from IBM.