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Blogposts on Intellectual Capital from icreporting.blogspot.com

Posted 2 months ago

Capital Markets know the value of Intellectual Capital

Intellectual Capital of a business is defined simply, in theory, as the value of the intangible assets of the business. As far as theory goes, this definition is entirely correct. But it is in practice where this definition falls woefully short.  The latest accounting standards (read IFRS compliance) require every business to report the value of its intangible assets in its balance sheet. What gets reported however is the value of the intangible assets as is recognized under the accounting ......... Read the complete article

Posted 45 months ago

Intellectual Capital has the same connotation as Economic Moat

Economic Moat is a term that is very familiar to value investors worldwide. The legendary investor Warren Buffet is credited with having coined this term. Investopediadefines it to be the competitive advantage that one company has over other companies in the same industry. The wider the moat, the better it is for the company as it helps the company to keep the competition at bay. Stockopediaidentifies 5 advantages that companies with wide moat hold over the competition: Intangible Asse......... Read the complete article

Posted 56 months ago

A proxy indicator for the Intellectual Capital of nations

I recently came across the book “Intellectual Capital of Nations” by Prof. Leif Edvinsson and Prof. Carol Yeh-Yun Lin and their associated research paper titled “National Intellectual Capital: comparison of the Nordic countries” which I downloaded from www.corporatelongitude.com. Both the research paper and the book present a comparative study by the authors on the Intellectual Capital of 4 leading nations in the world. Based on the outcomes of their study, the authors arrived at the conclusion ......... Read the complete article

Posted 59 months ago

Intellectual Capital analysis of change in Indian IT Leadership

The top four Indian IT companies – TCS, Infosys, Wipro and HCL Technologies - have declared their results for the quarter ending March 212. While TCS and HCL have surpassed analyst expectations, Wipro and especially Infosys have disappointed. The markets have been severely harsh on Infosys in particular, dropping it by about 13% in a single day on the 13th April when it declared its quarterly results. For a company which has been the face of Indian IT around the world for decades, this was quite......... Read the complete article

Posted 66 months ago

Lifestyle enhancers

Apple, 3M, GE, Sony, Toyota, Procter & Gamble, Samsung, etc. are among some of the well known companies that have been consistently voted into the list of the most innovative companies in the world for many years at a stretch. This begs the question – how do they do it? How do these companies make the list of most innovative companies in the world with such alarming regularity? What is it that they are doing right about innovation that their competition isn’t? After all, isn’t innovation fraught......... Read the complete article

Posted 70 months ago

Using IC to beat the Nifty hands down

IC practitioners the world over have produced tomes of literature in the past two decades to prove the value of Intellectual Capital in the modern Knowledge economy. There is not an iota of doubt about the importance of Intellectual Capital within the worldwide IC community. Countless modern Management Gurus - including Robert S Kaplan and David P Norton, inventors of the highly popular Balanced Scorecard and Strategy Map – and other thought leaders of our times have waxed eloquent about how it ......... Read the complete article

Posted 71 months ago

Taking IC to the mainstream

The subject of Intellectual Capital has existed for over 2 years now. The Swedish Konrad group was the first to recognize the contribution of intangible assets to the performance of a firm, way back in 1989. Based on their findings they proposed a list of 35 indicators, including indicators on Human resources and structural assets of the firm, which should be reported externally by the firm to its stakeholders. This was followed in 1996 by a more exhaustive and prescriptive approach by Brooking.......... Read the complete article

Posted 74 months ago

The downside of Scale Enablers

In my previous post, I had described how structural capital can be used to have unlimited scale in a business. I had provided two examples – how Automatic Teller Machines were instrumental in scaling the operations of banks at negligible marginal cost and how the Internet itself had been used by Google to scale its advertising business to the point where it has become a near monopoly in a very short span of ten years. Readers will surely find other examples which fit the pattern of scale enabler......... Read the complete article

Posted 79 months ago

Scale Enablers

In my last post I wrote about how reach-enabling Intellectual Capital is helping businesses overcome the scarce availability of talented human capital, such as teachers and doctors. This time I will extend the analogy to include the average line worker and in the process reveal yet another paradigm in the successful deployment of Intellectual Capital, something I call ‘Scale Enablers’. Let me start by asking you to recollect the last time when you had to personally visit your bank. No, not a dri......... Read the complete article

Posted 82 months ago

Reach Multipliers

Teachers are a scarce lot nowadays. Teaching is a noble profession no doubt and a highly honorable one too, but like a lot of other noble professions nowadays it is losing its shin in this modern age. There is no glamor in being a teacher anymore; hence not very many of the younger generation aspire to become teachers these days. Consequently their tribe is only decreasing. Paradoxically with the increasing population, school enrollments are on the rise. With the result that the demand for teach......... Read the complete article