Developing intellectual capital at skandia capital intelectual. Leif edvinsson is vice president and corporate director of ic and skandia future centers in sweden. In this context, by proposing a new intellectual capital measurement and reporting system, leif edvinsson and michael s. This complete summary of the ideas from leif edvinsson and michael s.
Knowledge assets underpin capabilities and core competencies of any organisation. By using these results the aim is to further examine a possible indicator for leveraging the efficiency of intellectual capital in a. Research regarding organizational capital suggests. To come back to the question of differences between. Intellectual capital in organizations 23 dec 2014 by. Petty and cuganesan 2005 assert that the term intellectual capital is often treated as being synonymous with intangible assets. Intellectual capital is a phrase covering corporate brainpower, information technology, and relationships with customers and suppliers, all of which influence a companys ability to make money. Leif edvinsson born in 1946 is a swedish organizational theorist, professor at the university of lund in sweden and consultant, known for his work on intellectual capital. This equity earns a very high return, an aftertax profit of 9. Intellectual capital is a set of non financial,non physical resources that procures a copmpetitive advantage for the enterprise jussupova, mariethoz and probst, 2007. A further refinement is the addition of customer capital, which includes the customers you have, your reputation and figure 1 financial and intellectual capital after relationship with them, edvinsson. It was the start not only of a legendary company but of an entire way of life in silicon valley and, ultimately, our modern digital age. Leif edvinsson is the author of intellectual capital 3. Intellectual capital in organizations 23 dec 2014 by leif.
Significantly, the word capital indicates that intellectual capital has value, and as such, can be measured and managed. Developing intellectual capital at skandia sciencedirect. Intellectual capital defining key performance indicators. Oct 01, 2004 measuring intellectual capital is on the agenda of most 21st century organisations. It is posited that reporting on intellectual capital may attempt to resolve uncertainty about the firm, thereby improving the stock price edvinsson and malone, 1997. If they were we would have to explain how it can happen that the worlds intellectual capital suffers a 40% depreciation over night, as we have seen to be the case in the financial crises of the intermediate past. National intellectual capital a comparison of 40 countries carol. This is reflected in the transformation of society into knowledge work and the increasing difference between the book value and the. They are all factors which tend to get overlooked because they are intangible and do not show up on a balance sheet. Malone to write the first book that explains the workings of ic measurement and its usefulness to the modern corporation. He is also special adviser to the swedish cabinet on the effects of the new digital economy, special advisor to the united nations international trade center and is a cofounder of the. Intellectual capital ic is intellectual material knowledge, information, intellectual property, experience that can be put to use to create wealth collective brainpower granstrand 1999 intellectual property ip is property directly related to the creativity, knowledge and the identity of an individual.
Leif edvinsson is corporate director of intellectual capital at skandia afs of stockholm, sweden. Malones book intellectual capital shows how intellectual capital represents the difference between a companys balance sheet and its market value. He was the worlds first director of ic in 1991, and is cofounder and. Another way of measurement of intellectual capital belonging to synthetic methods is knowledge capital earnings kce.
Intellectual capital for communities sciencedirect. The results of this lack of attention to intellectual capital can. This article describes skandias approach to measuring intellectual capital. Intellectual capital is the knowledge that individuals put into advantage in their respective companies. Download pdf electronic journal of knowledge management. Everyday low prices and free delivery on eligible orders. Intellectual capital in the digital economy 1st edition.
Leif edvinsson is a key pioneering contributor to the theory and practice of intellectual capital ic. The mustread summary of leif edvinsson and michael s. Edvinsson extracted two components for intellectual capital. The purpose of this study is to evaluate whether there is a correlation between the intellectual capital of employees, i. Within the literature, there is no precise agreement on what ic concept might be starovic and marr, 2003. Over the past decade, knowledge assets and intellectual capital have been. An overview of the intellectual capital ic intellectual capital is relatively new topic not only within the accounting and finance discipline but also within the business and management arena. National intellectual capital as an economic driver pirjo stahle. Now edvinsson has teamed up with noted business author michael s. Only owing to its implementation, productivity of material and financial resources grows. Intellectual capital the commitment and competence of workers is embedded in how each employee thinks about and does work and in how an organization creates policies and systems to get work done. This briefing will follow the approach adopted by the meritum guidelines for managing and reporting on intangibles and will use intangibles and intellectual capital interchangeably.
Edvinsson 1997 explains that intellectual capital consists of human, structural and customer capitals. Successful companies rely on traditional factors of production for their survival. Realizing your companys true value by finding its hidden brainpower. Pdf the purpose of this paper is to examine a number of major theoretical and empirical contributions in the field if intellectual capital with an. Johan roos is professor of general management and strategy at international institute for management development imd. A focus on intellectual lished an intellectual capital function headed by a capital provides an effective instrument to manage director of intellectual capitalthe. Here, the intellectual capital is a debt item which is regarded in the same way as equity. The human resources department creates value for these organizations by coming up with effective humanresource related solutions and creative ideas for. Intellectual capital is defined as all knowledge within an organisation which has the potential to create value when applied in line with the mission, vision and goals of the organisation. He was the first corporate director of intellectual capital in the world, and from then he has become a leading proponent of intellectual capital measurement d. Intellectual capital is also the first book ever to present a universal ic measurement and reporting system. Pdf developing intellectual capital at skandia leif. Content and determinants of intellectual capital disclosure. Malone is the author of numerous books on business and high technology, including the virtual corporation.
This is reflected in the transformation of society into knowledge work and the increasing difference between the book value and the market value of companies. First, intellectual capital is a firms only appreciable asset. There is no commonly agreed definition of intangibles the. Journal of intellectual capital capital intelectual. In light of his work in both training and intellectual capital, edvinsson has been a special advisor on service trade to the swedish ministry of foreign affairs. Just as an organizations value is a function of its intellectual capital, the wealth of a.
Intellectual capital is a set of non financial,non physical resources that procures a copmpetitive advantage for the enterprise jussupova. Skandia appointed leif edvinsson as director of intellectual capital. Definitions, categorization and reporting models article pdf available in journal of intellectual capital 94. Nicola carlo dragonetti is a business consultant with ics.
Intellectual capital navigating the new business landscape. Yet the most important and sustainable sources of competitive advantageknowledge, customer relations, supplyondemand, micromanagement, and other forms of intellectual capitaloften dont even appear on many companies reporting systems. A further refinement is the addition of customer capital, which includes the customers you have, your reputation and figure 1 financial and intellectual capital. Intellectual capital 2 definitions of intellectual capital 6 intellectual capital is the group of knowledge assets that are attributed to an organisation and most significantly contribute to an improved competitive position of this organisation by adding value to defined key stakeholders marr and schiuma 2001. Keywords ic as third dimension, ic metrics, intellectual capital statement. He is the worlds leading expert on intellectual capital. Pdf the relationship between intellectual capital and. To come back to the question of differences between accounting intangibles and tangibles. Intellectual capital johan roos, goran roos, nicola. Pdf developing intellectual capital at skandia leif edvinsson. An innovative model for measuring intellectual capital core. Leif edvinsson, former head of intellectual capital at skandia, was among the first to recognize that intangible assets, including organizational capital, were not represented in traditional accounting systems. Therefore it is possible to develop a tentative new balance sheet as shown in figure 2.
Goran roos is chairman of intellectual capital services ics. Leif edvinsson in 1998, while he was corporate director of intellectual capital in a swedish financial services company called skandia. Intellectual capital, social capital and communities of. It is based on the assumption that intellectual capital does not produce any value. Intellectual capital and valuation academic and business. According to this model, skandia divides market value into financial capital and intellectual capital. In the nursing intellectual capital theory, human capital investment is redefined as employer support for nurse continuing professional development.
The first book to address intellectual capital in the public sector leif edvinsson is the recognized world leader in this field the contributors are the leading experts in the world on their subject areas leif edvinsson was awarded the prestigious brain of the year award in 1998 against competition including bill gates. Malone interpret intellectual capital in the following manner. Intellectual capital, social capital and communities of practice. He was the worlds first director of ic in 1991, and is cofounder and founding chairman of the new club of paris.
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