Proceedings of the 3rd European Conference on Intellectual Capital

Nargiza Abdullaeva and Campbell Warden
Fifthly, it is significant to ensure and maximize <strong>the</strong> input <strong>of</strong> IC to economic development by providing
efficient social, demographic and environmental policies.
Sixthly, sustainability <strong>of</strong> economic development supposes that its main drivers should be renewable
factors, and <strong>the</strong> role <strong>of</strong> <strong>the</strong> government and society in achieving this is in maintaining <strong>the</strong> prevailing
usage and development <strong>of</strong> IC as a main factor <strong>of</strong> ED.
The assessment <strong>of</strong> <strong>the</strong> impact <strong>of</strong> IC to economic development can be done by using <strong>the</strong> National
Intellectual Capital <strong>of</strong> Andriessen and Stam (2004, see table 2) and HDI dynamics for ED. Although,
HDI dynamics do not give us <strong>the</strong> whole notion <strong>of</strong> economic development, it can show <strong>the</strong> main
changing direction <strong>of</strong> <strong>the</strong> human well-being in <strong>the</strong> country.
Table 2: Indicators for <strong>the</strong> effects <strong>of</strong> IC
Effects Human Capital Organizational Capital Relational Capital
GDP per hour worked
(as % <strong>of</strong> US)
Source: Andriessen and Stam, 2004, p.14
-Percentage <strong>of</strong>
businesses using <strong>the</strong>
Internet for purchasing
and selling
-value-added <strong>of</strong> hightech
industry, relative to
GDP
- birth rate <strong>of</strong> enterprises
The share <strong>of</strong> persons
with an equalised
disposable income below
<strong>the</strong> risk-<strong>of</strong>-poverty
threshold
-life expectancy at birth
- breadth <strong>of</strong> international
scientific collaboration
- percentage <strong>of</strong> patents
with foreign co-inventors
- export <strong>of</strong> loyalty and
license fees
- export <strong>of</strong> services
- high-tech export
Implementation <strong>of</strong> IC approaches for sustainable economic development – Practical overview
Significant research has been done on <strong>the</strong> IC impact on economic performance on <strong>the</strong> micro level.
Firer and Stainbank (2003) investigated <strong>the</strong> relationship between <strong>the</strong> IC on company’s performance
through pr<strong>of</strong>itability, productivity and market valuation variables in South Africa. The research
revealed <strong>the</strong> relationship between IC and pr<strong>of</strong>itability and productivity. Bonis et al (2000) found out
that human and customer capitals are important for <strong>the</strong> way that businesses are run, and that
structural capital positively influences a company’s performance. Riahi-Belcaoui’s (2003) research
supported <strong>the</strong> hypo<strong>the</strong>sis that IC is positively related to <strong>the</strong> company’s financial performance, through
investigation <strong>of</strong> MNCs performance in <strong>the</strong> US.
Vicious and virtuous cycles between IC investments and ED were found by EEC (1991). Barro and
Lee (1993), United Nations (2001) and World Bank (2001) found a positive relationship between IC
standards and ED levels.
At <strong>the</strong> same time, IC impact measurement on ED is related above all to overcoming <strong>the</strong> barriers <strong>of</strong>
measurement on <strong>the</strong> conception level, which were described in <strong>the</strong> <strong>the</strong>oretical part.
2. Conclusion and <strong>the</strong> questions for fur<strong>the</strong>r research
It is clear that IC is at <strong>the</strong> same time <strong>the</strong> precondition and consequence <strong>of</strong> economic development,
and HC and is created by human capital, where <strong>the</strong> structural and relational capitals are <strong>the</strong> main
drivers and receivers <strong>of</strong> economic development. Good governance, which consists <strong>of</strong> both efficient
human and organizational capitals, supports <strong>the</strong> interrelationship between IC and sustainable ED,
through development policies for IC and smoo<strong>the</strong>ning and facilitating <strong>the</strong> process <strong>of</strong> contribution <strong>of</strong> IC
to ED, through social, demographic and environmental policies.
Maintenance <strong>of</strong> <strong>the</strong> contribution <strong>of</strong> IC to ED is related to quality, relevance and accessibility <strong>of</strong>
education and training; education, knowledge and skills transfer/mobility freedom; <strong>the</strong> level <strong>of</strong>
absorption capacity <strong>of</strong> <strong>the</strong> new knowledge <strong>of</strong> <strong>the</strong> country; provision <strong>of</strong> favourable environment for
IC/business functioning and development in <strong>the</strong> country; and o<strong>the</strong>rs.
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