Intellectual Capital - Academic Conferences

José Ma.Viedma 

Professor at the Polytechnic University of Catalonia 

Barcelona, Spain 

http://www.jmviedma.com 

http://intellectualcapitalmanagementsystems.com 

http://icbsmonitor.com/

© José M. Viedma Marti 

INDEX 

Intellectual Capital Management Systems



The advent of the Knowledge economy. 

Labor 


Capital 

Land 

Intellectual Capital Management Systems 

Knowledge 

Agricultural 

Industrial 

Knowledge 

Fuente: Savage Ch. 1991.


Knowledge Economy Definition 


“… one in which the generation and exploitation of knowledge has come to play the 

predominant part in the creation of wealth. It is not simply about pushing back the 

frontiers of knowledge; it is also about the most effective use and exploitation of all 

types of knowledge in all manner of economic activity” 

(DTI Competitiveness White Paper 1998). 

“economic success is increasingly based on upon the effective utilisation of 

intangible assets such as knowledge, skills and innovative potential as the key 

resource for competitive advantage. The term “knowledge economy” is used to 

describe this emerging economic structure” 

Economic &Social Research Council 2005 

Source http://www.theworkfoundation.com/Assets/Docs/I%20Brinkley%20HE,%20FE%20and%20the%20Knowledge 

%20Economy.pdf



The four pillars that guide the transition to a 

Knowledge-based Economy. 

1. An economic and institutional regime that provides incentives for the 

efficient use of existing and new knowledge and the flourishing of 

entrepreneurship. 

2. An educated and skilled population that can create, share, and use 

knowledge well. 

3. An efficient innovation system of firms, research centers, universities, 

think tanks, consultants, and other organizations that can tap into the growing 

stock of global knowledge, assimilate and adapt it to local needs, and create 

new technology. 

4. Information and Communication Technologies (ICT) that can facilitate the 

effective communication, dissemination, and processing of information. 

Source: K4D. World Bank. Web-site.


Sustainable growth in the KE 


“Growth without technological advance is not good; it represents 

short-run advantage that will be paid for in long-run 

retardation”. 

“Technology, of course is applied, routinized knowledge and as such 

transferable. I include in technology both software and 

hardware, process innovations and product innovations, 

organizational gains as well as new methods.” 

David S. Landes 

Source: Neef, Dale (1998) The Knowledge Economy. No. 5 Landes, D. “Homo Faber, Homo Sapiens: 

knowledge, technology, Growth, and Development” pp 53-73 Butterworth-Heinemann, USA.

Interrelationship among Data, Information, 

Knowledge and I.C. 

Data 

& 

Ideas 

Data 


Information 

Organized 

data 

Knowledge 

explicit 

and 

tacit 

Is a set of beliefs about 

casual relationships 

in the world and 

an organisation 

Ron Sanchez 

Justified personal 

belief towards 

the truth. 

Ikujiro Nonaka 


Intellectual 

Capital 

Knowledge that 

produces value 

Knowledge 

and other 

intangibles 

that produce 

value




Competitiveness Definition 


“The degree to which a country can, under free and fair market 

conditions, produce goods and services which meet the test of 

international markets, while simultaneously maintaining and 

expanding the real incomes of its people over the long term”. 

(OECD “official” definition 2002)


Wealth creation and Nations’ 

Competitiveness 


“Nations themselves do not compete, rather, their enterprises do” 

“The role of nations in shaping the environment in which 

enterprises operate influence their competitiveness” 

“Competition among nations can be seen in the areas of education 

and know-how. In a modern economy, nations do not rely only on 

products and services, they also compete with brains” 

(Stéphane Garelli-IMD 2002) 

Source: http://members.shaw.ca/compilerpress1/Anno%20Garelli%20CN%20Fundamentals.htm


Wealth creation and Nations’ 

Competitiveness 

“It is well understood that sound fiscal and monetary policies, a trusted 

and efficient legal system, a stable set of democratic institutions, and 

progress on social conditions contribute greatly to a healthy economy. 

These broader conditions provide the opportunity to create wealth but do 

not themselves create wealth. 

Wealth is actually created in the microeconomic level of the economy. 

Wealth can only be created by firms. 

More than 80 percent of the variation of GDP per capita across countries 

is accounted for by microeconomic fundamentals. Unless microeconomic 

capabilities improve, macroeconomic, political, legal, and social reforms 

will not bear full fruit” 

(Michael Porter 2005) 


Source: http://www.iese.edu/en/ad/AnselmoRubiralta/Apuntes/Competitividad_en.html


Theoretical principles of wealth creation in the KE 

Who? 


Wealth or poverty of a specific nation is strongly dependant on the number of 

competitive or excellent companies that the specific nation has. 

Government does not create wealth but contributes to facilitate or to hinder 

wealth creation. 

An excellent or competitive company is the one that achieves long term 

extraordinary profits due to the fact that has a business model with sustainable 

competitive advantages. 

In the knowledge economy sustainable competitive advantages are mainly based 

on intangibles. Consequently strategic management of intangibles or intellectual 

capital becomes a fundamental task. 

In order to achieve business excellence strategy perspective is the key one. 

Source: Viedma & Cabrita ”Entrepreneurial Excellence in the Knowledge 

Economy”Palgrave Macmillan.2012


Theoretical principles of wealth creation in the KE 

How? 

Business excellence is always due to good strategy formulation and superior 

strategy implementation. 

Good strategy formulation and superior strategy implementation is always a human 

task and strongly depends on the quality of the top management team and the key 

professional people. 

In a continuous changing environment business models quickly get out-of-date and 

as a consequence of that, innovation in business models(1) becomes an urgent need. 

In any company the essential activity to perform is always innovation in the 

business model so it can be converted in an excellent or competitive business 

model. 

Companies alone do not create wealth. They need the collaboration of other 

companies, universities and research institutes, financial institutions, government 

and other organisations and institutions and specially the existing ones in the 

cluster, region or nation where the company is located. In other words they need to 

be active part of a territorial open innovation system and of, what some authors 

like to call, knowledge based ecologies. 

Source: Viedma & Cabrita ”Entrepreneurial Excellence in the Knowledge 

Economy”Palgrave Macmillan.2012 

(1) We consider, in this particular context, that innovation in business models, encompass all types of innovations, 

© José M. 

including 

Viedma Marti 

products, services, processes, technical, management, etc.


People 

Knowledge 

Intangibles 

Competitive Enterprises 

Innovative Enterprises 

Suitable Environment 

Wealth Creation in the KE 




Business Excellence Definition. 



An excellent business is the one that achieves 

growth and extraordinary profits during a 

long period of time due to the fact that has 

sustainable competitive advantages.





Strategy and Business Excellence 


“The key common ingredient in all success stories 

is the presence of a soundly formulated and 

effectively implemented strategy” . 

(Grant 1998)




Strategic Thought Development. 

Success or excellence 


Soundly formulated and effectively implemented strategies 

Intangible resources and capabilities 

Core Competencies 

Intellectual Capital 

Sustainable Competitive advantages





Soundly formulated and effectively 

implemented strategies 

Business Formula – Business Recipe


+ 

Recipe 

= 


© José M. Viedma Marti





























Venus and Serena Williams 





Benetton’s Store 


ZARA’s Store 






(Bussines 

Formula) 

BUSSINES EXCELLENCE 


The practice of intellectual capital management 

Good strategy 

formulation 

Formulation 

Not breaking down intellectual 

capital into its constituent parts 

SWOT 

ICBS 

Fundamentally 

Based on 

Core Competencies 

Core Capabilities 

Intellectual Capital 

Very good 

strategy 

implementation 

Models and tools more frecuently used 

(Bussines 

Recipe) 

Implementation 

Breaking down intellectual capital 

into its constituent parts 

Balanced Scorecard 

InCas




The Firm 

1. Goals and Values 

2. Resources and Capabilities 

3. Structure and Systems 

Source Robert Grant 1998. 

SWOT Analysis 

Strategy 


The Industry 

Environment 

• Competitors 

• Customers 

• Suppliers


The Firm 


2. Resources and 

capabilities 

• Core activities 

• Core competencies 

• Core knowledge 

3. Structure and systems 

• Strategic 

Benchmarking and 

competitive intelligence 

structure and systems 

ICBS 

Extended SWOT Analysis 

Benchmarking 

Benchmarking 

Benchmarking 

Strategy 

Strategy 

Benchmarking 


The world class industry 

segment competitors 


2. Resources and 

capabilities 

• Core activities 

• Core competencies 

• Core knowledge 

3. Structure and systems

Customer 

need 

identified 


INNOVATION OPERATIONS 

Design 

Core activities 

IICBS 

Develop 

Core competencies 

Innovation intellectual 

capital 

Innovation Intellectual Capital 

Benchmarking System 

ICBS 

Business Process Value Chain. 

Make 

Market 

Core activities 


Operations intellectual 

capital 

OICBS 

Service 

Operations Intellectual 

Capital Benchmarking 

System 


Customer 

need 

satisfied

Product A 

Service A’ 

CORE 

KNOWLEDGE 

PRESENT 

(Value Extraction) 

CORE 

COMPETENCIES 

PROFESSIONALS’ 

CORE 

KNOWLEDGE 


© 2011 José M. Viedma Marti 

Product A” 

Process A 

Service B 

Process B 

TANGIBLE 

RESOURCES 

Product B’ 

INTANGIBLE RESOURCES 

CORE 

COMPETENCIES 

CORE 

KNOWLEDGE 

Process C 

Process C 


CORE 

KNOWLEDGE 

CORE 

COMPETENCIES 

CORE 

KNOWLEDGE 


Service C 

Product C’ 


CORE 

KNOWLEDGE 

Service C” 

© Intellectual Capital Management Systems

Service A’ 

Service A 

Process A 

PRESENT 

(Value Extraction) 

CORE 

KNOWLEDGE 

Service A” 

Process A 

CORE 

COMPETENCIES 


CORE 

KNOWLEDGE 

Process A 


Service B 

Process B 

TANGIBLE 

RESOURCES 

Process B 

INTANGIBLE RESOURCES 

CORE 

KNOWLEDGE 


Service B’ 

Process B 

Process C 

Process C 

CORE 

COMPETENCIES 

CORE 

KNOWLEDGE 


CORE 

KNOWLEDGE 

Process C 

Service B” 

Service C 

Service C” 

Service C’ 

FUTURE 

(Innovation) 

NEW CORE 

CAPABILITIES 

NEW CORE 

KNOWLEDGE 

NEW PROFESSIONALS’ 

CORE KNOWLEDGE 

New Product M 

New Process 

New Process 

New Product M’ 

TANGIBLE 

RESOURCES 

NEW INTANGIBLE RESOURCES 

NEW CORE 

CAPABILITIES 

NEW CORE 

KNOWLEDGE 


CORE KNOWLEDGE 

Intellectual © Intellectual Capital Management Capital Management Systems 

New Process 

New Product M” 

NEW CORE 

CAPABILITIES 

NEW CORE 

KNOWLEDGE 


CORE KNOWLEDGE

(h) = Homologous 


Customer 

needs 

Company A Company B 

B.U. 

Objectives 

Products 

and Services 

Processes 

Core 

Competencies 

Professionals 

core competencies 

Operations 

infrastructure 

Flowchart 1 

Benchmarking 

GAP 

Benchmarking 

GAP 

Benchmarking 

GAP 

Benchmarking 

GAP 

Benchmarking 

GAP 

Benchmarking 

GAP 

B.U. 

Objectives (h) 

Products 

and Services (h) 

Processes 

(h) 

Core 

Competencies(h) 

Professionals 

core competencies 

(h) 

Operations 

Infrastructure(h) 


Operations Intellectual Capital Benchmarking System

Key success 

factors 

6 

7 



The eight-factors framework 

8 

Financial 

results 

5 

Outsourcing level 

or alliance 

activities 

FACTORS 

1 

Customer 

needs 

satisfaction 

4 

Outsourcing 

activities 


2 

Products and 

services 

3 

Core business 

activities

7 

6 


1 

ICBS 

framework 

5 

Factors Criteria Questionnaires 

8 

4 

2 

3 

Implementing ICBS framework. 

Criterion 1 

Criterion 2 

Criterion 3 

.......... 

Competence 1 

Competence 2 

Competence 3 

.......... 


Human Capital 1 

Structural Capital 2 

Relational Capital 3 

..........












ICBS. Customer needs sa1sfac1on 



ICBS. Products and services 



ICBS. Core Business Ac1vi1es 



ICBS. Outsourcing Ac1vi1es 



ICBS. Outsourcing level in Ac1vi1es 



ICBS. Core Competencies 


1.Fashion creation 


ICBS. Core Competencies 



ICBS. Key success factors 








(detail)


Strategy check up in the past 



ICBS: Strategy Check-up nowadays. 



Additional Information 

http://www.icbsmonitor.com 







The Balanced Scorecard Model 


Kaplan RS & Norton DP (1996) “The Balanced Scorecard”, 

Harvard Bussiness School, Press Boston. Massachusetts, U.S.A. 

Kaplan RS & Norton DP (2001) “The Strategy Focused 

Organization”, Harvard Bussiness School, Press Boston. 

Massachusetts, U.S.A. 

Kaplan RS & Norton DP (2004) “Strategy Maps”, Harvard 

Bussiness School, Press Boston. Massachusetts, U.S.A. 

Kaplan RS & Norton DP (2006) “ Alignment ” Harvard Bussiness 

School, Press Boston. Massachusetts, U.S.A. 

Converting intangibles assets into tangible outcomes. 

www.bscol.com (Balanced Scorecard Collaborative, Inc.)

Customer 

To achieve our 

Vision, how should 

we appear to our 

customers ? 



Objective 

s Measures 

The Balanced Scorecard 

Targets 

Initiatives 

Financial 

To succeed 

financially, 

how should we 

appear to our 

shareholders ? 

Vision 

and 

strategy 

Learning and Growth 

To achieve our 

vision, how will 

we sustain our 

ability to change 

and improve ? 

Objective 

s Measures 

Objective 

s Measures 

Targets 

Initiatives 

Internal Business Process 

To satisfy our 

shareholders and 

customers, what 

business processes 

must we excel at ? 

Targets 

Initiatives 


Objective 

s Measures 

Targets 

Initiatives 

Source: Kaplan, R. Norton D. (1996). The Balanced Scorecard.


Communicating 

and Linking 

: , R. D. (1992). 


Clarifying and 

Translating the 

Vision and Strategy. 

Balanced 

Scorecard 

Planning and 

Target Setting 


Strategic Feedback 

and Learning 

R.S. Kaplan and D.P. Norton





Financial 

Customers 

Internal 

Business Process 

Learning and 

Growth 


Strategy Map 

Product quality 

Financial Results 

Sales Growth 

Customer loyalty 

Customer Satisfaction 


On time delivery 

Employee Training Motivation




European Project: 


Intellectual Capital Statement, Made in Europe “InCas” 

Research & Development: 

• London School of Economics-LSE (United 

Kingdom) 

• Politechnic University of Catalonia-UPC 

( Spain) 

• Fraunhofer-Intitute for Production systems 

and Design Technology-IPK ( Germany) 

Project Cordination: 

• Conféderation Européene des Associations 

de petites et Moyennes Enterprises ( CEA- 

PME) 

InCaS’ Team


Strategy 

Objectives 

European Project: 

Strengthen European SMEs’ 

competitiveness and innovation potential 


Intellectual Capital Statement, Made in Europe “InCas” 

Establish Intellectual Capital Statement (ICS) 

as the strategic management and reporting 

tool for the knowledge driven economy 

Develop a pragmatic methodology for European 

SMEs 

Provide a European ICS Guideline and 

supporting software “ICS toolbox”

Sector „Develop!“: 

High potential for 

improvement, 

high impact 

well-aimed 

development of factors 

with highest potential 

for intervention 

Sector „Analyse!“: 

High potential for 

improvement, 

low impact 

Analyse in more 

detail, observe… 


ICS Step 4: Potential Portfolio for Deriving Measures 

Impact 

Product Innovation 

Management 

Processes 

Average Assessment 

Investor Relations 


Sector „Stabilise!“: 

Low potential for 

improvement, 

high impact 

keep on good level, 

avoid falling back (risk 

management) 

Sector „No need for 

action“: 

Low potential for 

improvement, 

low impact 

currently no need 

for action


Detailed Impact Analysis Including Time Delays to Define 

Measures for Improvement 



Additional Information 

http://www.incas-europe.org 


http://www.psych.lse.ac.uk/incas/index.html





Conclusions of State of the art of practical 

applications in intangibles strategic management 

Business Excellence is always due to good 

strategy formulation and excellent strategy 

implementation. 

For strategy formulation the most well-known 

framework is SWOT analysis, but in the future 

ICBS can be the reference for the knowledge 

economy context. 

For strategy implementation BSC is leading the 

field for big companies but InCaS is becoming the 

standard methodology for SME’s.



Entrepreneurial 

Excellence in the 

Knowledge Economy! 

Intellectual Capital Benchmarking 

Systems! 

By José Maria Viedma Martí and 

Maria do Rosário Cabrita! 

www.palgrave.com






Global Competitiveness Index 

in Jordan 


Source: WEF. Global Competitiveness Report 2012-2013



The most problematic factors for doing business in Jordan 

Source: WEF. Global Competitiveness Report 2012-2013


Jordan based companies 

Banking: Arab Bank plc., Jordan National Bank, 

Chemicals: Hydro-Agri Jordan, 

Construction: Jordan Cement Factories Co., 

Energy & water: Jordan Petroleum Refinery Co 

, State: Public institution, 

Holding: Jordan Investment Telecommunications Co., 

Metals & mining: Jordan Phosphate Mines Co., 

Telecommunications services: Jordan Télécom, 

Jordan Telecommunications Co, 

Transportation services: Royal Jordanian Airlines, 



Petra 



Jerash 



Dead Sea 




C 

i 



“In the Knowledge economy Intangibles are the main 

source of sustainable competitive advantage and 

wealth creation , nevertheless strategic management 

of intangibles in a systematic and organised way still 

is in the infancy period” 

José María Viedma

Intellectual Capital - Academic Conferences

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