While it may be true that knowledge is power, in the current era it is more accurate to say that knowledge is value – economic value. In this information age, individual knowledge, expertise, skill, and the ability to acquire additional knowledge, expertise, and skill, are the primary sources of institutional and individual advancement. Most firms believe that the knowledge possessed by their employees is their major asset and their primary source of competitive advantage. In the words of Fortune magazine editor Thomas Stewart, “Information and knowledge are the thermonuclear competitive weapons of our time.”

Today's firms value not merely specific technical knowledge, such as computer code or biotechnical discoveries, but also more mundane types of knowledge, such as how the business operates, how the goods are produced, how paperwork flows, and how files are organized. Employees also have valuable knowledge about the firm's product, the context in which it is produced, and the environment in which the firm competes, including knowledge of business plans, upcoming projects, past projects, and past experience. There is also enormous value in employees' knowledge about customers, markets, and competitors. One particularly valuable type of knowledge is called “negative knowledge” – knowledge of products tested or systems tried that proved to be unproductive. Such knowledge in the hands of a competitor can save huge expenditures in duplicative and wasteful efforts in pursuit of dead ends.

As firms and employees have come to recognize the enormous value of employees' human capital, disputes over ownership of human capital have increased.