Intellectual Capital Measurement Methods

Intellectual Capital Measurement Methods
Market-to-
Book Value
Technology
Broker
Citation-
Weighted
Patents
The Value
Explorer
Intellectual
Asset Valuation
Total Value
Creation,
TVC
Stewart
(1997)
Luthy
(1998)
Brooking
(1996)
Bontis
(1996)
Andriessen
&
Tiessen
(2000)
Sullivan
(2000)
Anderson
&
McLean
(2000)
The value of Intellectual Capital is considered to
be the difference between the firm’s stock market
value and the company’s book value.
DIC Methodologies
Value of intellectual capital of a firm is assessed
based on diagnostic analysis of a firm’s response
to twenty questions covering four major components
of intellectual capital: Market Assets,
Human-centred Assets, Intellectual Property
Assets and Infrastructure Assets.
The base of the develop of the Technology Broker
method is that the market value of a company
is the result of the addition of tangible assets
and the intellectual capital.
A technology factor is calculated based on the
patents developed by a firm. Intellectual capital
and its performance is measured based on the
impact of research development efforts on a series
of indices, such as number of patents and
cost of patents to sales turnover, that describe
the firm’s patents.
Accounting methodology proposed by KMPG
for calculating and allocating value to 5 types of
intangibles: 1) Assets and endowments, 2) Skills
& tacit knowledge, 3) Collective values and
norms, 4) Technology and explicit knowledge,
5) Primary and management processes.
Methodology for assessing the value of Intellectual
Property.
A project initiated by The Canadian Institute of
Chartered Accountants. TVC uses discounted
projected cash-flow to reexamine how events
affect planned activities.
within the same industry.
However, they give far too
little detail for an adequate
comparison.
The DIC is intended to be
holistic and offer the potential
to create a more
comprehensive picture of
an organization’s health
than financial metrics. The
methods are more detailed
and can be easily applied at
any level of an organization.
They measure intellectual
capital resources from the
bottom up and can therefore
be faster and more accurate
than ROA and MCM
measures with respect to
resources. Since they do
not need to be measured
in financial terms, they are
very useful for not-for-profit
organizations, business
units, government agencies,
and for environmental
and social purposes. Their
disadvantages are that they
cannot be connected easily
to financial results
Human
Capital Intelligence
Fitz-Enz
(1994)
Sandia Navigator
Edvinsson
and
Malone
(1997)
SC Methodologies
Sets of human capital indicators are collected
and benchmarked against a database. Similar
to HRCA.
Intellectual capital is measured through the
analysis of up to 164 metric measures (91 intellectually
based and 73 traditionally metrics) that
cover five components: 1)financial, 2)customer,
3)process, 4) renewal and development, 5)human.
The idea is the Intellectual Capital is formed by
the addition of the Structural Capital and Human
Capital. This Structural Capital is also formed
by: Human Capital and Organization Capital;
and this last one is formed by the Innovation
Capital, and the Process Capital.
SC methods offer the potential
to create a more
comprehensive picture of
an organization’s health
than financial metrics, and
they can be easily applied
at any level of an organization.
They also measure intellectual
capital resources from
the bottom up. They are
very useful for not-for-profit
organizations, business
units, government agencies,
and for environmental
and social purposes. Their
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