Proceedings of the 3rd European Conference on Intellectual Capital

Nargiza Abdullaeva and Campbell Warden
The research involved in <strong>the</strong> implementation <strong>of</strong> issues <strong>of</strong> IC in sustainable economic development is
related to several interrelated and interdisciplinary realms.
Firstly, clearly defining Intellectual Capital and Economic Development and <strong>the</strong>ir components, which
is not easy because <strong>of</strong> <strong>the</strong>ir abstract and complex character.
Secondly, <strong>the</strong> measurement issues <strong>of</strong> IC and ED.
Thirdly, <strong>the</strong> IC-ED impact methodology, which is directly related to <strong>the</strong> above mentioned realms.
Researching <strong>the</strong>se questions in this Paper in general, <strong>the</strong> results <strong>of</strong> <strong>the</strong> practical overview <strong>of</strong>
implementation <strong>of</strong> IC on sustainable economic development are presented. At <strong>the</strong> end <strong>the</strong> short
results <strong>of</strong> <strong>the</strong> ongoing research are given, as well as a list <strong>of</strong> fur<strong>the</strong>r questions to be investigated.
Definition and dynamics <strong>of</strong> IC
There is no single definition <strong>of</strong> “Intellectual Capital” and its components among scientists. The
shortest and <strong>the</strong> most capacious IC definition was given by Stewart (1997, p. 67), which identify IC as
"packaged useful knowledge."
Intellectual Capital includes, toge<strong>the</strong>r with Human Capital, Relational and Organizational Capitals,
which are <strong>the</strong> necessary factors for <strong>the</strong> economic performance <strong>of</strong> a company and <strong>the</strong> economy as a
whole. IC includes personal experiences, skills, education and training, information technologies,
research and development, innovation, organizational intelligence, and etc. While significant research
has been done on HC starting from <strong>the</strong> 1960s, relational and organizational capitals have been less
investigated by economists due to <strong>the</strong>ir more interdisciplinary and complex character.
It should be noted that not only IC <strong>the</strong>ory is still in <strong>the</strong> process <strong>of</strong> development, but also <strong>the</strong> main
object <strong>of</strong> <strong>the</strong> <strong>the</strong>ory – Intellectual Capital itself – is going through significant changes. One <strong>of</strong> <strong>the</strong>se
changes is related to <strong>the</strong> focus shifting <strong>of</strong> IC according to time needs dynamics. According to Scandia
Navigator, <strong>the</strong> focus on financial elements as a basis <strong>of</strong> past IC had been shifted to customer, human
and process focuses, and in <strong>the</strong> future <strong>the</strong>se focuses will be shifted towards renewal and
development, i.e. more related to innovation activities.
Figure 1: Dynamics <strong>of</strong> intellectual capital focus (Scandia Navigator)
Source: Edvinsson, L.and M. S. Malone (1997), Intellectual Capital: Realizing Your Company's True
Value by Finding Its Hidden Roots. - HarperCollins Publishers, Inc., New York.
IC Components and Measurement Issues
Several difficulties arise while measuring <strong>the</strong> interrelationship between IC and economic
development.
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