Assessing intellectual capital creation in regional clusters
| Pages | 351-365 |
| Date | 01 September 2004 |
| DOI | https://doi.org/10.1108/14691930410550345 |
| Published date | 01 September 2004 |
| Author | Aino Pöyhönen,Anssi Smedlund |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Assessing intellectual capital
creation in regional clusters
Aino Po
¨yho
¨nen and Anssi Smedlund
Department of Business Administration, Lappeenranta University of
Technology, Lappeenranta, Finland
Keywords Intellectual capital, Knowledge management, Information networks, Systems theory
Abstract To provide a theoretical model of the dynamics of intellectual capital creation in regional
clusters and in inter-organizational networks. The model has been constructed on the basis of
earlier studies, especially system’s theoretical interpretation of organizations as knowledge
systems, and then applied to the examination of a regional cluster operating in the mechanical
wood processing industry in Eastern Finland. Intellectual capital in regional clusters is created by
three main knowledge creation activities, each of which corresponds to a specific type of an
inter-organizational network. First, production networks aiming at efficiency and replication
should function according to mechanistic system logic, focusing on the enactment of rules and
regulations. Development networks aiming at continuous incremental development, on the other
hand, are most successful when adhering to an organic mode, which emphasizes participation,
tacit knowledge sharing, dialogue and mutual adjustments. Finally, innovation networks seeking to
produce new intangible assets benefit from a dynamic systems model, where entropy and
spontaneous knowledge flows form the basis for mastering radical change. Model should be applied
to more cases to ascertain its validity. Provides means for understanding, assessing and managing
creation of knowledge-based value in inter-organizational collaboration. Addresses three gaps in
existing research: it focuses on regional intellectual capital; it examines the ways in which
intellectual capital is created as a dynamic process; it provides means for understanding the future
potential of a region.
Introduction
There exists a widespread agreement that the differences in the competitiveness of
organizations are based first and foremost on their intangible resources and capabilities
to extract value from them (Drucker, 1988; Prahalad and Hamel, 1990; Quinn et al., 1997;
Teece et al., 1997). Moreover, it has been noted that intellectual capital is a signific ant
source of competitiveness on national level (Bontis, 2003; Edvinsson, 2002; Edvinsson
and Stenfelt, 1999). According to the logic of the knowledge-based economy also the
success of a region depends essentially on the ability of its actors to employ, circulate and
create knowledge. In other words, the ability for intellectual capital creation is a crucial
determinant for regional competitiveness.
Nevertheless, most of the research on intellectual capital has focused on individual
companies rather than on more macro-level units such as regions or nations (Bontis,
2003). Furthermore, even though there are several theories about the composition of
intellectual capital, as well as measurement frameworks for assessing the actualized,
already existing intellectual capital (Edvinsson and Malone, 1997; Kaplan and Norton,
1992; Sveiby, 1997; Stewart, 1997; Roos et al., 1998; Sullivan, 1998), there is
relatively little knowledge about “the ways in which intellectual capital is created
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/1469-1930.htm
This paper is the winner of the 1st Edvinsson/Saint-Onge Best Student Paper Award, 2004.
Assessing
intellectual
capital creation
351
Journal of Intellectual Capital
Vol. 5 No. 3, 2004
pp. 351-365
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930410550345
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