Editorial

Citation

Chase, R.L. (2007), "Editorial", Journal of Intellectual Capital, Vol. 8 No. 1. https://doi.org/10.1108/jic.2007.25008aaa.001

Editorial

Our understanding of intellectual capital and its management continues to evolve and expand. On the one hand, there is still much work to be done in fundamental areas such as creating metrics to value IC and how to make it transparent through reporting mechanisms. On the other hand, a more foundational understanding of IC will enable practitioners to extend concepts to areas such as the development of knowledge cities and regions, and the relationship of IC with social and environmental capital. These are some of the critical issues that the Journal of Intellectual Capital will address this year.

In their paper “The importance of intellectual capital reporting” Roland Burgman and Göran Roos propose a much more broadly conceived concept of enterprise value reporting based on the dual requirements of financial and operational reporting. The requirement for financial reporting is taken as a given. It is in relation to operational reporting that intellectual capital reporting has a fundamental and substantial contribution to make. The authors argue that this is particularly the case for those business models that do not represent the traditional value chain. Burgman and Roos identify ten major forces to make the case for the necessity for operational reporting and within that context, intellectual capital reporting. These forces are all dynamic in terms of their content and impact. Many of these forces are also interdependent with one another. The authors believe that these forces are the most important phenomena in shaping the expectations for investment returns from capital markets and the reporting behaviors of listed companies.

The paper by Andreas N. Andreou, Annie Green and Michael Stankosky presents a suggested list of operational knowledge assets based on qualitative empirical findings from high technology US federal government contractors. The list consists of 31 categories (critical success factors) grouped into seven value-generating activities (performance focus areas). This list depicts knowledge assets as antecedents to a validated Framework of Intangible Valuation Areas (FIVA). The framework reveals internal views of a business that define the strategic value drivers that are aligned with organizational performance. The findings of this research should improve managers’ understanding of the human capital drivers on performance.

In “Intellectual capital and financial returns of companies”, the authors investigate the relationship between the intellectual capital of firms and their financial performance. They used the Value Added Intellectual Coefficient (VAIC™) approach to study 150 publicly listed companies on the Singapore stock exchange between the years 2000 and 2002. The authors report that IC and performance are positively related; IC is correlated to future company performance; the rate of growth of a company’s IC is positively related to the company’s performance; and the contribution of IC to company performance differs by industry.

G. Bharathi’s paper reports on the findings of survey to determine the intellectual capital performance of the Indian banking sector. The author analyzed the intellectual or human capital and physical capital of the Indian banking sector using the Value Added Intellectual Coefficient (VAIC™) approach for the five-year period from 2000 to 2004. The research results revealed that the overall top performers in human capital efficiency were clearly the foreign banks, the overall top performers in capital employed efficiency were the public sector banks, and the overall top performers in value creation efficiency analysis were the foreign banks.

The public sector banks in India seemed to have a large and inefficient work force, which was not contributing to the overall value creation. This paper can be used as a benchmark for evaluating the true performance of banks in India in the emerging regional and global competitive environment.

“A dynamic monetary model for evaluating employees” reports on research to make visible human intellectual capital in the financial accounting statement. The author’s model states that the value of an employee is the sum of the employee’s purchase value and the value of investments in the employee, less the value adjustment of an employee. The author also addresses the issue of evaluating a group of employees.

The Chinese market presents numerous challenges to companies from industrialized nations. None of these challenges is more daunting than protecting intellectual property (IP). The need to develop a fresh approach is necessary for the USA, EU and Japanese governments and companies in order to take advantage of China’s growing domestic market while not exposing their IP to continued losses. The paper by Sameer Kumar and Jorgen Ellingson is based on a review of existing literature on IP rights infringements in China, application of theory of sustainable competitive advantage as a prescription to discourage imitation and promote early-mover advantages, and SWOT analysis of the contrasting US and Japanese IP strategies. The authors have determined that both US and Japanese IP strategies have advantages and disadvantages, but the question remains as to which country can be the most creative and adaptive in their ultimate goal of preserving their IP rights while prospering in the world’s largest marketplace. A prescriptive approach is outlined for companies from the industrialized world to mange their efforts in protecting IP in this emerging market with vastly different social and economic structure.

Anssi Smedlund and Marja Toivonen apply the concept of knowledge-intensive business services (KIBS) to the analysis of IC development in regional clusters. The different kinds of networks and different types of knowledge flowing in these networks form the starting point for the analysis. Drawing upon recent literature, it is argued that KIBS provides the timely information needed in production networks, transfers best practices that support learning in development networks, and functions as sources of innovation and facilitators of innovation processes in innovation networks.

Faced with increasing environmental problems, traditional methods for transmitting information regarding corporate environmental actions are insufficient. Accordingly, E. Claver-Cortés et al. propose a theoretical conceptual frame to facilitate the analysis of reported corporate environmental information using the knowledge map, the environmental capital report, and the balanced scorecard (BSC). Five case studies of environmentally proactive firms (BP, Shell, Nike, Telefónica Group and McDonald’s) are used to show the use of these tools in the managerial area.

Rory L. Chase