Proceedings of the 3rd European Conference on Intellectual Capital

Eduardo Tomé
<strong>the</strong> numbers <strong>of</strong> doctors or hospitals, <strong>the</strong> numbers <strong>of</strong> computers, net users, telephones and
Televisions, <strong>the</strong> numbers <strong>of</strong> patents and brands and <strong>the</strong> numbers <strong>of</strong> Researchers in R&D.
Third, <strong>the</strong> ultimate result <strong>of</strong> all <strong>the</strong> supply <strong>of</strong> IC is <strong>the</strong> “Knowledge Worker” (KW),
A KW being someone who uses intensively IC. When we consider that a country that has a large
supply <strong>of</strong> IC, we mean that its workforce is healthy and educated, and that its organizations are
known as world leaders. The reverse happens in countries that lack <strong>the</strong> supply <strong>of</strong> IC.
It should be noted that <strong>the</strong>re is a difference between being an intensive producer <strong>of</strong> IC and a large
producer <strong>of</strong> IC. In fact, a negative relation seems to exist between intensity and quantity. IC
seems to be better and more intensively produced in small countries like <strong>the</strong> Nordic. This is
probably explained by <strong>the</strong> decreasing returns to scale which defines <strong>the</strong> provision <strong>of</strong> quality
services.
3.2.2 Demand
The same questions that were addressed in relation to <strong>the</strong> Supply <strong>of</strong> IC, should be put forward in
relation with <strong>the</strong> demand <strong>of</strong> IC.
First, IC is demanded by <strong>the</strong> individuals and organizations <strong>of</strong> a given country. The demand for IC
depends <strong>of</strong> <strong>the</strong> activity <strong>of</strong> organizations and <strong>of</strong> <strong>the</strong> welfare <strong>of</strong> individuals. This means that <strong>the</strong>
demand for IC should represent more <strong>the</strong> Business side and it should act as a counterpart <strong>of</strong> IC
Supply, which, as we just saw, is centred in <strong>the</strong> Welfare State. However, <strong>the</strong> distinction is
somehow unclear), because one organization may supply and demand IC at <strong>the</strong> same time. As
we will see in <strong>the</strong> next section, we believe that <strong>the</strong> supply and <strong>the</strong> demand <strong>of</strong> IC are very closely
related;
Second, <strong>the</strong> demand must be measured using <strong>the</strong> same scale as <strong>the</strong> supply, in order to permit
market comparison;
Third, <strong>the</strong> demand for IC should be measured by <strong>the</strong> level and number <strong>of</strong> Knowledge workers that
<strong>the</strong> economy <strong>of</strong> a given country wants to employ in a given year. When we say that a country has
a large demand for IC, we mean that <strong>the</strong> people and organizations that work in that country desire
intensively each one <strong>of</strong> <strong>the</strong> partial constituents <strong>of</strong> <strong>the</strong> IC notion, as defined in 2.1. When we say
that <strong>the</strong> country has a small demand <strong>of</strong> IC we mean <strong>the</strong> opposite.
3.2.3 Price
By price <strong>of</strong> IC we mean <strong>the</strong> amount <strong>of</strong> funds that a member <strong>of</strong> <strong>the</strong> public (someone who demands <strong>the</strong>
good or service) needs to obtain one unit <strong>of</strong> <strong>the</strong> good. This amount <strong>of</strong> funds may be spent by <strong>the</strong>
private consumer, but may also be awarded by <strong>the</strong> public sector or even by a third sector
organization.
In economic terms and when <strong>the</strong>re is equilibrium, <strong>the</strong> price should be equal to <strong>the</strong> amount <strong>of</strong> funds
that <strong>the</strong> providers <strong>of</strong> <strong>the</strong> good or service want to obtain from each unit <strong>of</strong> IC. In consequence:
If <strong>the</strong> IC is considered in a macroeconomic perspective we may say that in some countries <strong>the</strong> IC
is expensive in comparison with o<strong>the</strong>r countries, measured in dollars or in Power Purchase
Parities (PPP);
However if <strong>the</strong> IC is considered in a microeconomic perspective, we find different prices in each
country, for each type <strong>of</strong> IC constituent;
Finally, we must be aware that <strong>the</strong> current prices in a country may be very low (e.g. Bangladesh),
and due to inefficiency or inexistence <strong>of</strong> supply, <strong>the</strong> possible price for <strong>the</strong> IC constituent in that
market can be socially unbearable.
3.2.4 Quantity
By quantity we mean <strong>the</strong> amount <strong>of</strong> IC sold and purchased in <strong>the</strong> market. Again, it can be assumed
that <strong>the</strong>re is a macroeconomic quantity <strong>of</strong> IC for <strong>the</strong> IC as a whole, or several microeconomic
quantities for each one <strong>of</strong> <strong>the</strong> constituents <strong>of</strong> <strong>the</strong> IC. The microeconomic analysis would deepen and
diversify <strong>the</strong> first macro impression.
Given <strong>the</strong> relationship between price and demand or price and supply, it should be possible, for each
country, to define a Demand curve and a Supply curve. Thus:
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