Encapsulated knowledge is the value endowing meta-resource originating from thought, reflection, or experience that is embedded in an artefact’s design and functionality.
The observability of explicit, codified knowledge makes it susceptible to misappropriation.
Finally, both codification and encapsulation are motivated by a desire to inexpensively transfer knowledge.
For example, utility can be realized from the use of knowledge encapsulated in a computer or an automobile apart from having to learn why they work.
The vast majority of transactions that occur in consumer markets involve the purchase of some form of encapsulated knowledge.
Knowledge Assets: Securing Competitive Advantage in the Information Economy.
"Strategies for Managing Knowledge Assets: the Role of Firm Structure and Industrial Context".