Intellectual Capital in the Knowledge Economy: A Review of Methods and Models

Abstract

Reflecting the influence of intellectual capital and intangible assets, the change from the industrial to the knowledge economy has resulted in a boom in company market value. Conventional financial measures are inadequate in reflecting the actual worth of these assets. The complex nature of evaluating and managing these intangible assets has led to the proliferation of several intellectual capital models, each with its unique characteristics. The paper deployed the content analysis technique to evaluate some well-known (popular) intellectual capital models; Balanced Scorecard (1992), Skandia Navigator (1994), Calculated Intangible Value (1995), Intellectual Capital Index (IC-IndexTM) (1997), and VAICTM (1997). The evaluation of these models aims to provide companies with a sophisticated awareness of these models while enabling them to properly manage and use their intangible assets to support continuous development and enhance their competitive advantage in the knowledge economy. Acting as a quantified measure of intellectual capital, the VAICTM stands out as a unique metric that supports its general acceptance in the academia. The findings reveal that despite every model offering a unique feature, an all-encompassing assessment of intellectual capital could come from integrated approach. This study intends to help companies in determining and using the most suitable approaches for their intellectual capital management strategies by providing a comprehensive evaluation of these models, leading to their improved innovation capabilities and long-term success.