Types of Capital

Types of Capital

Types of Capital Jonathan Poland

Capital is an asset that is expected to produce future economic value. It is a productive resource that is used by societies, firms, and individuals to create wealth and generate income. Overall, capital is a productive resource that is used to create economic value. There are many different types of capital, and each type plays a unique role in the economy.

Human Capital
Human capital are the talents and health of people that allows them to produce future value. Generally speaking, people don’t like to be referred to as capital. However, this is an important concept of economics that encourages investment in quality of life such as education and healthcare.

  • Cultural Capital
  • Health
  • Knowledge
  • Talent

Relational Capital
Relational capital is the value of relationships and social structures. For example, a firm with a million loyal customers has more productive potential than a firm with zero loyal customers. Likewise, social structures and systems such as society, culture and community all increase the economic prospects of people.

  • Community
  • Culture
  • Investor Relationships
  • Loyal Customers
  • Organizations
  • Partnerships
  • Society
  • Talented Employees

Natural Capital
Natural capital is any natural resource that has value. This is often destroyed due to a situation known as tragedy of the commons whereby firms and individuals don’t pay for their damage to these resources.

  • Air
  • Ecosystems
  • Forests
  • Geological Features (e.g. rocks)
  • Land
  • Minerals
  • Organisms
  • Water

Tangible Capital
Physical things build by humans that have productive potential.

  • Buildings
  • Computers
  • Equipment
  • Infrastructure
  • Machines
  • Vehicles

Intangible Capital
Non-physical things that have productive potential. This includes relational capital listed separately above.

  • Brands
  • Data
  • Knowledge
  • Patents
  • Software
  • Trademarks

Current Assets
The assets of a business that can be quickly converted to cash or that are intended to be sold or used within a business cycle.

  • Accounts Receivable
  • Cash
  • Inventory
  • Marketable Securities
  • Prepaid Expenses
  • Supplies

Financial Capital
Financial capital is cash, cash equivalents and assets with cash value. For a business, financial capital is often classified according to its source. Equity capital is cash that was raised by the investors who own the business. Debt capital are loans from creditors that are used as capital by the business.

  • Current Assets
  • Debt Capital
  • Equity Capital
  • Working Capital
Information Security Jonathan Poland

Information Security

Information security is the practice of protecting information from unauthorized access, use, disclosure, disruption, modification, or destruction. It is a…

Negotiation Tactics Jonathan Poland

Negotiation Tactics

Negotiation tactics are strategies and techniques used in the process of negotiation to help achieve an individual or group’s objectives.…

Business Decisions Jonathan Poland

Business Decisions

A business decision is a commitment made by a company, team, or individual employee to a specific course of action.…

What is Complex Sales? Jonathan Poland

What is Complex Sales?

A complex sale is a type of sales process that involves multiple stakeholders, a high level of customization, and a…

Reputational Risk Jonathan Poland

Reputational Risk

Reputational risk refers to the potential for damage to an organization’s reputation as a result of its actions or inactions.…

Media Analysis Jonathan Poland

Media Analysis

Media analysis is the study of the structure, content, and methods of communication in various forms of media. This involves…

Innovation Metrics Jonathan Poland

Innovation Metrics

Innovation metrics are tools used to assess the innovation efforts of a company. It can be challenging to accurately measure…

Administrative Skills Jonathan Poland

Administrative Skills

Administrative skills are abilities and personality traits that enable a person to be efficient and organized in a workplace setting.…

Overhead Costs Jonathan Poland

Overhead Costs

Overhead costs, also known as “indirect costs” or “indirect expenses,” are the costs that a company incurs in order to…

Learn More

Original Research Jonathan Poland

Original Research

Original research refers to the creation of new knowledge through the investigation of a topic or problem. This can involve…

Abundance Mentality Jonathan Poland

Abundance Mentality

Abundance mentality is the belief that there is enough for everyone, and that abundance, rather than scarcity, should be the…

Human Resources Jonathan Poland

Human Resources

Human resources is the department within a business that is responsible for managing and coordinating the people who work for…

Examples of an Argument Jonathan Poland

Examples of an Argument

An argument is a series of statements or reasons that support a particular position or viewpoint. This position can be…

Post Sales Jonathan Poland

Post Sales

After a sale is made, post-sales processes kick in to fulfill the customer’s expectations and strengthen the relationship. This can…

Local Marketing Jonathan Poland

Local Marketing

Local marketing refers to any marketing strategy that targets customers in a specific, finely-grained location, such as a city or…

Concentration Risk Jonathan Poland

Concentration Risk

Concentration risk refers to the risk that a specific investment or group of investments could pose a threat to the…

What is a One Stop Shop? Jonathan Poland

What is a One Stop Shop?

A one stop shop is a business that offers a wide range of products and services from a single location,…

Project Stakeholder Jonathan Poland

Project Stakeholder

A stakeholder is anyone or any group that is impacted by a project. This includes individuals or teams who are…