Cognitive Capital and its Profitability

The capital structure of the knowledge economy

The knowledge economy is a qualitatively new stage in corporate capital development, which is not based on a real-industrialized, and cognitive-computer form (fig.1). In this regard, a growing need for the study of the functioning of the new system, particularly with regard to defining the role and place of the state in economic processes management. The impact of the new technological order for the development of economic structures is a promising direction in economic theory.

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One of the most urgent problems of the modern economy - ensuring long-term sustainable economic development. It is well known that its decision includes a number of basic conditions for sustainable development: the value of the capital consumed in the year must be less than or equal to the value of its growth. In industrial-type economy based on extensive development and use of largely drying up the resources to fulfill this requirement is problematic. At the new stage of development, the capitalist economy is based on the production cycle of a new form of capital - cognitive capital.

Knowledge is the main productive resource and source of value. Then the cognitive capital is based on a resource of scientific and technological knowledge has its peculiarities in the formation of yield.

The concept of cognitive capital

At the moment, common category’s definitions of the cognitive capital have not developed in the economic theory. The first definition gives F. Machlup in his works (Machlup, 1966). He soon found a new trend, what defined the essence of the new category. Cognitive capital like any other capital is based on a special resource - share of scientific and technical knowledge.

Cognitive capital – is the result of the application of accumulated knowledge and intangible fundamental human intellectual activity, manifested in the generation of innovations, ideas, invention or improvement of techniques and technologies, including endo-resources technologies (Kirshin, & Titov, 2012). Cognitive capital has the properties of non-material resources - safety (not subject to physical wear and tear), unlimited (storage limit does not exist), the accumulation of economic resources spent on its production (human capital, industrial capital, natural capital, intellectual capital). Knowledge can be defined as «a set of subordinate facts or opinions constituting a reasoned statement or experimental result that can be transmitted to other people using the means of communication in a certain systematic form» (Litvak, 2010; Polre, 2007). In this interpretation of knowledge - it is the result of cognitive human perception of the accumulated information. Knowledge becomes a form of cognitive capital accumulation value invested for its creation of a capital - human, intellectual and physical.

Knowledge is not a guide value used for its creation of resources; knowledge contributes to the generation of new forms of capital. There is a problem of commercialization of cognitive capital and convert it into cash (Rullani, 2007). The open question is the formation of surplus-value to a new form of capital.

Return on cognitive capital

What is the income on cognitive capital? One can cite the following example. One Russian defense enterprise «Strela» in addition to military developments launched in the production technology of manufacturing titanium golf club, which reduced the cost of production in the aerospace facilities of the plant up to $ 20 per share (Prosvetov, & Filippov, 2003). The best-known global branding firm Golfsmith sells similar goods, but under its own brand for $ 400 apiece. Accordingly, the co-operation of the Russian aerospace company with famous brands allowed it, on the basis of cognitive capital, a new method of production of titanium stick, make a profit. Under its own brand company would be selling these sticks less than $ 100 apiece, while cooperation with the international well-known company, she received a return on capital by paying a certain percentage (25%) of the trade mark by getting extra income. And this income in its pure form is the income on cognitive capital, the application of new knowledge. That is, the stick was made completely new way, the same stick. Unfortunately, the project did not last long, the production stood out in a small independent firm that could not stand competition.

Cognitive capital is not some kind of a new category, it is that part of the intellectual capital that allows you to earn an income multiple of the above. That is the intellectual capital of the company branding allowed receiving 25% royalty, and everything else gets a Russian company, that is, receives income on cognitive capital.

That is, income for cognitive capital is the income that creates a temporary monopoly. When competing companies have mastered a new technology production of titanium stick, which, according to the chief technologist of the plant «Strela», «superior technology to produce housings aircraft missiles» the Russian small innovative firm could not stand competition (Gromer, 2003).

The state's task is to protect innovative production on the basis of cognitive capital. Such a policy will strengthen the position of the national economy in the international market, as the yield of cognitive capital is a multiple greater than all other forms. In addition, the use of cognitive capital allows us to pass on a sustainable mode of reproduction of the economy because of its special properties.