Proceedings of the 3rd European Conference on Intellectual Capital

Eduardo Tomé
IC is demanded by individuals, and also by <strong>the</strong> three types <strong>of</strong> sectors (public, private and non
pr<strong>of</strong>itable private) previously mentioned, as a way <strong>of</strong> satisfying <strong>the</strong>ir needs; we are refereeing
here to <strong>the</strong> cells <strong>of</strong> <strong>the</strong> economic tissue, being <strong>the</strong>m ei<strong>the</strong>r individuals or organizations, when
consuming IC.
Three important points must be made:
The difference between developed, developing and emerging countries is that in <strong>the</strong> first <strong>the</strong> WM
is very developed, in <strong>the</strong> second is almost inexistent and in <strong>the</strong> third is only taking shape (see
3.2.1 and 3.2.5);
In developed countries a great difference exists in <strong>the</strong> way <strong>the</strong> WM is organized, generating
different types <strong>of</strong> Welfare States (WSs) (see 3.2.1);
Even if <strong>the</strong> demand and <strong>the</strong> supply are made by <strong>the</strong> three sectors that constitute <strong>the</strong> WS (public
private and non pr<strong>of</strong>itable private), as an activity and it is very different to supply IC or to demand
IC
3.2.7 The role <strong>of</strong> <strong>the</strong> State
IC has important societal consequences, and IC is surely a matter <strong>of</strong> social policy. The public
intervention in <strong>the</strong> IC market may be explained by market failures or by equity matters. The public
intervention may be made by rulings, funding or provision. Social programs linked to IC are usually
evaluated by <strong>the</strong>ir direct results, ei<strong>the</strong>r in physical (persons supported) or in financial (money spent)
terms. Impact studies can define <strong>the</strong> economic consequences <strong>of</strong> <strong>the</strong> operations (Tomé, 2005).
The scope and extension <strong>of</strong> <strong>the</strong> public intervention in <strong>the</strong> IC market depends <strong>of</strong> two factors:
In <strong>the</strong> developed countries it depends on <strong>the</strong> type <strong>of</strong> WS or WM; a Liberal form <strong>of</strong> WS has much
less public intervention that a Social Democratic or a Socialist form <strong>of</strong> WS;
In <strong>the</strong> world, as a whole, it <strong>the</strong> depends on <strong>the</strong> existence or <strong>the</strong> absence <strong>of</strong> <strong>the</strong> WMs; countries in
which no WS exists or in which only a quasi WS exists, have comparatively less public
intervention in <strong>the</strong> IC market than <strong>the</strong> countries having high levels <strong>of</strong> WS.
3.2.8 Need
The need <strong>of</strong> Intellectual Capital is measured by <strong>the</strong> gap between <strong>the</strong> level <strong>of</strong> IC that exists in <strong>the</strong>
society and level that should exist in order to <strong>the</strong> country to be one <strong>of</strong> <strong>the</strong> top Knowledge Based
Economies (KBE)s in <strong>the</strong> world. This means that <strong>the</strong>re is a fundamental difference between need and
demand. A simple example that may illustrate such difference is <strong>the</strong> following: in a developing country
<strong>the</strong> demand for IC may be small, because companies and organizations do not want to hire KWs, in
spite <strong>of</strong> <strong>the</strong>ir great need, because <strong>the</strong> level <strong>of</strong> IC would have to increase immensely if <strong>the</strong> country
would become developed and world leader. The need <strong>of</strong> IC may be measured ei<strong>the</strong>r in terms <strong>of</strong>
supply or in terms <strong>of</strong> demand or in terms <strong>of</strong> equilibrium.
3.2.9 Investment
The investment in IC is defined by <strong>the</strong> expenses made by <strong>the</strong> society to increase <strong>the</strong> levels <strong>of</strong> IC. It
may be defined in terms IC as a whole, or for every one <strong>of</strong> its constituents, and it was defined in 2.1
(education, training, health, basic infrastructures, R&D, brands, etc). In some way, <strong>the</strong> investment in
IC is very much related with <strong>the</strong> supply <strong>of</strong> IC, as <strong>the</strong> production <strong>of</strong> any good is related with <strong>the</strong>
previous investment in <strong>the</strong> production function. However, <strong>the</strong> investment in IC is different from <strong>the</strong>
supply <strong>of</strong> IC. The investment is accounted by <strong>the</strong> money spent, but on <strong>the</strong> contrary, <strong>the</strong> supply is
measured by <strong>the</strong> level <strong>of</strong> social structures that ultimately enable <strong>the</strong> existence <strong>of</strong> KWs. Those social
structures are made available in consequence <strong>of</strong> <strong>the</strong> expenditures, but are not equal to those
expenditures. A high investment may generate a high supply, but not necessarily. A high investment
may generate a small supply, if <strong>the</strong> money is not well spent. The supply is <strong>the</strong> first and more basic
outcome <strong>of</strong> <strong>the</strong> investment.
3.2.10 Stock
For each country, in every year, it should be possible to define <strong>the</strong> stock <strong>of</strong> IC. That stock represents
<strong>the</strong> number <strong>of</strong> available items in <strong>the</strong> country for each one <strong>of</strong> <strong>the</strong> parts from which IC is made <strong>of</strong>. That
stock may be defined in Human (workers) and in Non Human (patents, science) terms. It is important
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