Proceedings of the 3rd European Conference on Intellectual Capital

Summary on Intellectual Capital Value Added (VAIC) and
Calculated Intangible Value (CIV) all Over <strong>the</strong> World:
Lessons to be Learnt
Nellija Titova
University <strong>of</strong> Latvia, Riga, Latvia
nellija.titova@inbox.lv;
Abstract: Over <strong>the</strong> period 1959-1997 a diverse set <strong>of</strong> academic researchers and economists developed a new
view on business strategy that emphasized resource efficiency ra<strong>the</strong>r than <strong>the</strong> generally accepted competitive
forces. The researchers discovered <strong>the</strong> intellectual capital. In <strong>the</strong> late 1990s <strong>the</strong> problems encountered in trying
to put into practice <strong>the</strong> prevailing IC models and methodologies led to <strong>the</strong> development <strong>of</strong> new methodologies
and an alternative <strong>the</strong>oretical paradigm. Among <strong>the</strong> most popular concepts <strong>of</strong> that period were Value Added
Intellectual Capital (VAICTM) and Calculated Intangible Value (CIV). The first one was invented in 1993 by Pr<strong>of</strong>.
Dr. Ante Pulic, University pr<strong>of</strong>essor and businessmen, who started to investigate into <strong>the</strong> changes in current
economy and widely presented in <strong>the</strong> years 1998-2001. The latter was developed and popularized in <strong>the</strong> year
1997 by Thomas Stewart. Both represent so called group <strong>of</strong> <strong>the</strong> applications <strong>of</strong> <strong>the</strong> models and methods based
on <strong>the</strong> analysis <strong>of</strong> <strong>the</strong> monetary values <strong>of</strong> <strong>the</strong> companies. CIV measures <strong>the</strong> monetary value <strong>of</strong> IC or IC stock,
VAICTM describes how a company‟s IC adds value to <strong>the</strong> company. Since 1998 results <strong>of</strong> <strong>the</strong> application <strong>of</strong> <strong>the</strong>
models and fur<strong>the</strong>r analysis <strong>of</strong> <strong>the</strong> results have been presented at numerous scientific conferences throughout
<strong>the</strong> world. Indeed, <strong>the</strong> researches using <strong>the</strong> same methods did not get identical results, though analyzing <strong>the</strong>
same industry and testing <strong>the</strong> same hypo<strong>the</strong>sis. Developing strategic planning system, in <strong>the</strong> beginning <strong>of</strong> <strong>the</strong>
21st century appeared <strong>the</strong> idea on testing <strong>the</strong> interaction <strong>of</strong> <strong>the</strong> Standard financial indicators and Intellectual
capital performance indicators. Analyzing <strong>the</strong> impact <strong>of</strong> <strong>the</strong> Intellectual capital on enterprise financial data in <strong>the</strong>
current period <strong>the</strong>re were several interactions discovered. The results were sometimes controversial; <strong>the</strong>refore
additional research is still needed. Fur<strong>the</strong>rmore <strong>the</strong>re is already one research published on <strong>the</strong> longitudinal
analysis <strong>of</strong> IC indicators and financial performance indicators. The author <strong>of</strong> <strong>the</strong> paper aims to make one <strong>of</strong> <strong>the</strong>
first attempts to make <strong>the</strong> extensive summary on application <strong>of</strong> CIV and VAIC in different countries, providing <strong>the</strong>
information on various aspects <strong>of</strong> <strong>the</strong> analysis and its interpretation and extracting <strong>the</strong> key findings. Summarizing
<strong>the</strong> results <strong>of</strong> <strong>the</strong> researches, <strong>the</strong> key finding is that some <strong>of</strong> <strong>the</strong> results seem to be <strong>the</strong> same for all <strong>the</strong> segments
<strong>of</strong> economies and countries analyzed, some seems to be controversial. The main question <strong>of</strong> <strong>the</strong> paper is what
lessons we can learn from <strong>the</strong> application <strong>of</strong> <strong>the</strong> models.
Keywords: intellectual capital, evaluation, intangible assets, calculated intangible value (CIV), value added
intellectual coefficient (VAICTM), human capital, structural capital and capital employed, financial performance
indicators
1. Introduction
In <strong>the</strong> 1995 <strong>the</strong> VAIC concept was developed by Pr<strong>of</strong>. Dr. Ante Pulic, pr<strong>of</strong>essor and businessmen.
His prime interest was <strong>the</strong> processes <strong>of</strong> value creation in contemporary economy and <strong>the</strong> role <strong>of</strong>
Intellectual capital (IC) in this context.
In <strong>the</strong> 1998 <strong>the</strong> VAIC concept and its application in business practice were <strong>of</strong>ficially presented to
academia and practitioners and in <strong>the</strong> year 1999 <strong>the</strong> first VAIC analysis <strong>of</strong> Croatian top 400
companies and its results were presented at round table organized by leading Croatian economic
magazine.
By now VAIC has been applied at all levels <strong>of</strong> business activity both at macro level - at national,
sector, regional and city level and micro level and <strong>the</strong> results <strong>of</strong> <strong>the</strong> application <strong>of</strong> <strong>the</strong> models have
been presented at numerous scientific conferences throughout <strong>the</strong> world. VAIC methodology is
receiving increasing research attention and applied use.
The CIV was developed and popularized in <strong>the</strong> year 1997 by Thomas Stewart but little or no empirical
research has been carried out related to CIV.
The author <strong>of</strong> <strong>the</strong> paper aims to make one <strong>of</strong> <strong>the</strong> first attempts to make <strong>the</strong> extensive summary on
application <strong>of</strong> CIV and VAIC in different countries, providing <strong>the</strong> information on various aspects <strong>of</strong> <strong>the</strong>
analysis and its interpretation and extracting <strong>the</strong> key findings. Summarizing <strong>the</strong> results <strong>of</strong> <strong>the</strong>
researches, <strong>the</strong> key finding is that some <strong>of</strong> <strong>the</strong> results seem to be <strong>the</strong> same for all <strong>the</strong> segments <strong>of</strong>
economies and countries analyzed, some seems to be controversial. The main question <strong>of</strong> <strong>the</strong> paper
is what lessons we can learn from <strong>the</strong> application <strong>of</strong> <strong>the</strong> models.
543