Lately I have found myself musing about the IC Community, what I would like it to be, its current state, and its present trajectory. All in all, I can’t say that I am not exactly pleased with the way things stand.
To begin with, our IC community arose out of a serendipitous juxtaposition of early innovators, a perceived set of business and government needs, and a desire to just make things better. The early years of the ICM movement were characterized by dramatic increases in our collective knowledge about the thing called “intellectual capital”. It took a while before we came to understand that there were several quite different perspectives on the thing called IC and that each perspective had implicit assumptions and objectives. We learned this by talking with one another and finding it difficult to communicate.
With hindsight, I think we now understand that our difficulties were based on differences in perspective as well as on differences in geography and environment. At the moment, I would say that there are three very different genres of the Intellectual Capital community, and that they are currently divided by geography: the North American movement, the European movement and the ASEAN movement.
The European movement seems dominated by what may be called the “IC-as-Assets” perspective. In Europe, the business community comprises a large number of small and medium-sized businesses (SME’s), many with strong family ties and funding. There is also a strong cooperation between business and government in Europe, quite different from what is the case in North America. Further, businesses in Europe tend to take a longer view of their enterprise; in part because of a lesser reliance on their capital markets for funding and more upon family or other resources. In Europe, the IC interest has largely been around human capital, with governments seeking to learn how to define and train necessary skills in order to produce a workforce capable of extracting value from national resources. The European IC Community has been strongly influenced by the early progress of the Scandinavian countries whose interest was in inventorying the firm’s human capital and harnessing its intellectual assets toward the firm’s business. Much of the community’s efforts were put into classifying and inventorying IC “assets”, and secondarily into disclosing them to shareholders, investors, and government bodies. The academic community in Europe is actively engaged in research into IC management, although it appears to my eyes that this research is disconnected from the needs of European businesses and focused on the need for academic publication more than on providing insights for business and government. Research seems to be backward-looking, using acceptable research methods and tools that, unfortunately, look at the past in the hope of divining the future.
The North American community, on the other hand, is more interested in the “value-extraction” perspective on intangibles, seeing them as newly-discovered sources of revenue. The North American business community comprises a larger percentage of very large corporations, a healthy mid-sized company sector, and a strong small company sector. With a different political and social history, there is a traditional aversion to cooperation with government in this part of the world. Companies here have an arm’s length relationship with government, where the arm is never nearly long enough. Companies in this geographical sphere have a strong dependence on the capital market for basic resources and for working capital. With the North American capital markets interested in a firm’s capability to repay any debt or equity positions, companies feel a great pressure to develop newer and ever more reliable sustainable revenue streams. This has led to a great interest on the part of North American companies in the “hidden value” that resides within their intangibles. . . . . . hence the interest in both Edison in the Boardroom and Einstein in the Boardroom. Much of the North American focus is on extracting ever more value from the firm’s intangibles, particularly if these value streams can be shown to be sustainable. In North America there is virtually no academic interest either in research on the management of intangibles or on how to extract value from them. As there is no official “field of study” for such a discipline, academics spend time on IC management only at their professional peril.
The ASEAN community is still in its early stages, and shows signs of drawing upon its two older sisters for its development. In the ASEAN countries one finds an even smaller percentage of very large companies, an equally smaller percentage of medium-sized companies, and a very large portion of small companies. Governments in this part of the world evidence a great interest in helping their business community to profit from the emerging world of intangibles, if only they knew the best way to do so. At this juncture, there seems to be a leaning of companies and governments more toward the European perspective on IC, yet with a distinct and well-voiced interest in creating new and strong revenue streams however possible. It is still too early for me to know much about the ASEAN academic community, so I must withhold comment in this sphere.
On its current trajectory, our IC world appears poised to provide us with more-of-the-same. Yet, I suspect that we collectively would like something different. I think we would like to find ourselves in a community that has several key new characteristics:
· One that responds to the needs of the local business, government and regulatory communities, yet draws on the perspectives found in other geographic regions
· One where the academic community is focused on supporting the various stake holding groups in the community (business, government, and society), and where the focus of research is on the future where we know the value of intangibles most often resides.
· One where the various disciplines of IC management are better able to converse and build upon one another’s perspectives rather than remaining relatively aloof from one another as is often currently the case.
· One where we may build on the strengths of each of the three regions, learning from one another, and building new strength into our respective business and government stake holding groups in pursuit of the larger interest of our world society.
OK, OK, I know this may all sound a bit altruistic, if not downright snooty. Perhaps I should just settle for something simpler; like patent system reform, or demonstrating the link between the firm’s intangibles and stock price. . . . . . . . .I’ll keep you posted on my progress.