Metrics for the elements of intellectual capital in an economy driven by knowledge

Abstract

Purpose – The purpose of this paper is to explore the plausibility of six elements of IC and justify the measurement ability of a set of indicators based on publicly available data for each of the proposed element in order to provide tools to managers for their decision-making process in knowledge management (KM). Design/methodology/approach – Core company's intangibles are combined into six intellectual capital (IC) elements that appear after the division of each of the traditional components (human, structural and relational capital (RC)). The human capital includes management and human resources capabilities (HRC). Structural capital is divided into innovation and internal process capabilities (IPC). RC contains networking capabilities and customer loyalty. In drawing on the relevant literature each element is described through a set of indicators collected from publicly available data. The validity of proposed IC model is justified through structural equation modeling. Each element is tested on a sample of more than 1,650 listed European companies over the period of 2004-2011. Findings – The study gives empirical support of three component IC structure and its decomposition into second level. The findings reveal that implementation of KM plays a significant role for HRC as well as for IPC. Research limitations/implications – The analysis was conducted for a particular sample that may restrict the conclusions. Practical implications – The proposed measurements for intangibles can be applied by any company for benchmarking and comparative analysis in KM. Originality/value – The study provides empirical justification of metrics for intangibles allowing a better route in an economy driven by knowledge.

Monetary valuation of intellectual human capital in innovative activity

“…Many research works have been devoted to the issues on how human, social and intellectual capital influences innovation activity (Wu, & Wann-Yih, 2008;Gogan & Draghici, 2013;Teo & Stephen, 2014;Ugalde-Binda & Nadia, 2014;Lu & Wen-Min, 2014;Carraro & Carlo, 2014;Molodchik et al, 2014;Balcerzak, 2016). This article gives the authors' view on the structure of an employee's intellectual capital and on its monetary valuation as a key factor of the efficiency of a company's innovation activity.…”

INTELLECTUAL CAPITAL: influence on asset specificities

“…Structural capital was divided into ability of innovations (CI), and the ability of internal process (CPI). Relational capital was separated into capabilities of networks (CR) and loyalty and reputation to the consumer (LR) (Molodchik et al, 2014).…”

“…These intangibles include knowledge related to customers, suppliers, government, and industrial associations (Bontis, 1998). Several studies (Bontis, 1998;Edvinsson & Malone, 1998;Molodchik et al, 2014;O'Donnell & O'Regan, 2000;Reilly, 1996;Stewart, 1998;Sveiby, 1998) presented elements that make up the components of intellectual capital. Each component of the intellectual capital exposed characteristics, such as the difficulty in establishing properties rights and the impossibility of equivalent information between agents, which resemble the formation of characteristics of assets specificities in transactions, which are covered by the TCE.…”

“…Human capital (CH) consists of every ability, knowledge, skills and individual experiences of individuals belonging to the organization, compounding the capacities of human resources and management skills (Edvinsson & Malone, 1998;Molodchik et al, 2014). This component represents the qualified workforce (Reilly, 1996).…”

“…In 90s, several authors have sought to understand how the intellectual capital was composed in organizations, developing categories of analysis (Bontis, 1998;Edvinsson & Malone, 1998;Molodchik, Shakina, & Barajas, 2014;Reilly, 1996;Saint-Onge, 1996;Stewart, 1998;Sveiby, 1998). Studies developed by Edvinsson and Malone (1998), Stewart (1998) and Sveiby (1998) feature recognized structures as a way of understanding the intellectual capital.…”