Guest editorial
| DOI | https://doi.org/10.1108/JIC-05-2021-389 |
| Date | 16 April 2021 |
| Published date | 16 April 2021 |
| Pages | 433-438 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Merrill Warkentin,Veronica Scuotto,Leif Edvinsson |
Guest editorial
Twenty years of history: the 20th anniversary special issue of Journal of
Intellectual Capital
The Journal of Intellectual Capital (JIC) recently celebrated its 20-year history of publishing
high-quality scientific articles exploring research questions about intellectual capital (IC),
including human capital, structural capital and relational capital. To commemorate these 20
years of publishing, the editorial team announced a special issue on this history and to
explore the future of this field of scientific inquiry. This special issue carries on the tradition of
excellence in research and offers insightful articles for our readers.
In the previous century, most companies were valued primarily on their book value: that
is, a publicly traded firm’smarket capitalization (“market cap”equals share price times
number of outstanding shares) was often not much greater than its “book value”(the value of
all its tangible assets, like “plant and equipment”), with only a few firms demonstrating
higher valuations because of growing sales, brand value, strategic relationships or other
factors not found on a firm’s balance sheet. Tangible assets made up over 83% of US firm’s
valuations in the 1970s. This is no longer true. Currently, about 90% of the value of the
“S&P500”(the 500 largest publicly traded companies in the US) now comprises intangible
assets. How did this happen? How do we measure this value? How can firms exploit their
opportunities to grow this value? How can this be sustained? How can it be protected and
secured?
IC collectively refers to all the factors that determine an organization’svalue.Itisthe
individual and collective knowledge and skills, applied experience and expertise, enterprise
processes, technologies, customer relationships and inter-organizational relationships which
confervalue to a firm often not measured throughtraditional accountingmethods. It comprises
human capital (of employees), organizational (or collective)capital and relationship capital.IC
also stands for future earning capabilities (Edvinsson, 2013).
IC is often the primary driverof an organization’s success. It starts with the creativity and
innovation createdby individuals and workgroups who develop knowledge artifacts such as
intellectual property, disruptive technologies, brands and franchises, and innovative internal
processes, and successful external partnerships and alliances. Firms and not-for-profit
organizations who harness and leverage these information and knowledge artifacts can
increaseefficiencies and effectiveness,can establishstrategic sources ofcompetitive advantage
and can ultimately create IC assets, not shown on a balance sheet, which can result in
differencesbetween a company’smarket value and its book value.Such firms (and others)often
transform this IC intosignificant growth and disruption of market sectors.
These key knowledge artifacts, increasingly the source of a firm’s value, must be created
and exploited. Firms seek to hire personnel to “think outside the box”and then create formal
and informal environments that foster innovation. Firms must create an organizational
culture that promotes the creation of such knowledge artifacts and then ensures it can
blossom.
These key information and knowledge assets must also be secured and protected, a
deceptively challenging task in a hyper-connected and complex world. Traditional firm
assets were physical –it was impossible to steal a factory! But in the present day, it is
imperative that organizations pursue strategies and methods that protect their digital
information assets from internal and external threats. Employee mistakes, malicious insider
activities and external hackers are amongst the human threat vectors of concern, as are a
range of technical threats to the security of IC.
Guest editorial
433
Journal of Intellectual Capital
Vol. 22 No. 3, 2021
pp. 433-438
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-05-2021-389
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