Knowledge Economy

An economic model in which businesses generate recurring revenue by providing ongoing access to products or services rather than one-time sales. The subscription economy elevates the importance of intangible assets such as customer relationships, brand trust, and product stickiness, which together determine retention and lifetime value.

The unintended transfer of knowledge from one firm or sector to others, creating wider economic benefits that the original investor cannot fully capture. Knowledge spillovers are a defining characteristic of intangible investment and a key justification for public policy support of R&D, education, and innovation.

A business strategy that minimises investment in physical assets and instead relies heavily on intangible assets such as software, brand, data, and intellectual property to generate revenue. Asset-light companies typically exhibit higher scalability and return on capital but can be harder to value using traditional balance-sheet methods.

A professional who studies, analyses, and interprets the production, distribution, and consumption of goods and services. Economists apply quantitative and qualitative methods to understand economic behaviour at both micro and macro levels, informing policy decisions, business strategy, and investment analysis.

A loss of value caused by an asset's inability to perform its intended function as efficiently as current alternatives. For intangible assets such as software or process knowledge, functional obsolescence can occur rapidly due to technological advancement, making regular revaluation essential for accurate enterprise value assessment.

The Organisation for Economic Co-operation and Development — an intergovernmental body of 38 member countries committed to promoting policies that improve economic and social well-being. The OECD plays a pivotal role in intangible asset and productivity research, producing influential studies on the measurement and economic impact of intangible investment, knowledge-based capital, and innovation.

The process of transferring technological knowledge, intellectual property, or capabilities from one organisation or context to another. Technology transfer is central to the commercialisation of university research, licensing agreements, and cross-border investment, and its effectiveness depends on the quality of codified knowledge and absorptive capacity of the recipient.

An umbrella term for the broad range of services delivered over the internet on a subscription basis, encompassing Software as a Service, Platform as a Service, Infrastructure as a Service, and numerous specialised variants. XaaS business models convert capital expenditure into operating expenditure for customers and derive the majority of their enterprise value from intangible assets including recurring customer relationships, proprietary platforms, and data.

How do you value marketing-related intangible assets in a PPA?

Marketing-related intangible assets (brands, trademarks, trade dress, domain names, social media presence) are valued primarily via Relief from Royalty using comparable trademark royalty rates from licence evidence.

What intangible assets do startups typically have?

Startups typically hold intangible assets including proprietary technology, brand identity, founder expertise, customer relationships, IP (patents, trade secrets), and organisational processes — often unrecognised on the balance sheet.

What intangible assets matter most for exit preparation?

For exit preparation, the highest-value intangible assets are customer relationships (retention and LTV data), proprietary technology (defensible IP), brand equity, recurring revenue contracts, and documented organisational processes.