Intellectual capital: national implications for industrial competitiveness
| Pages | 866-890 |
| Date | 22 June 2012 |
| DOI | https://doi.org/10.1108/02635571211238491 |
| Published date | 22 June 2012 |
| Author | Kongkiti Phusavat,Narongsak Comepa,Agnieszka Sitko‐Lutek,Keng‐Boon Ooi |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Intellectual capital: national
implications for industrial
competitiveness
Kongkiti Phusavat
Center of Advanced Studies in Industrial Technology, Kasetsart University,
Bangkok, Thailand
Narongsak Comepa
Faculty of Engineering, Kasetsart University, Bangkok, Thailand
Agnieszka Sitko-Lutek
Faculty of Economics, Marie Curie-Sklodowska University, Lublin, Poland, and
Keng-Boon Ooi
Linton University College, Mantin, Malaysia
Abstract
Purpose – The paper is based on a project with the Department of Industrial Work (DIW) in Thailand
for promoting intellectual capital (IC), which aims to boost the country’s long-term industrial
competitiveness. The purpose of this paper is to focus on examining the interrelationships between IC
and economic development (i.e. GDP per capita) in Thailand and other neighboring countries in
Southeast Asia. The second objective is to identify the IC targets to help enable the DIW to propose
future policy initiatives relating to IC.
Design/methodology/approach – The key steps include a selection of IC indicator(s) to assess IC
impacts on the country’s economic development. There are five countries (Indonesia, Malaysia, the
Philippines, Singapore and Thailand) to be examined for the IC impacts due to their economy sizes.
The methodology involves statistical analysis for understanding the interrelationships and identifying
the IC targets for Thailand and the future policy initiatives are derived through the review discussion
with DIW administrators.
Findings – Initially, two IC indicators were selected. However, only National Intellectual Capital
Indicator (NICI) was statistically significant to the GDP per capita. A further examination revealed
that the NICI target for Thailand and a remaining three countries needs to reach 5.0, in order to move
from the efficiency-driven to the innovation-driven stage. The economic development stages are
outlined by the Global Competitiveness Report (published by World Economic Forum) which indicates
a GDP per capita over $US 17,000.
Originality/value – The paper underlines the need for the DIW to continue a development of the
IC-related performance indicators for local firms, in both manufacturing and service sectors. In the
past, the DIW has encouraged them to primarily measure quality and productivity (including
Economic Value Added) as their key non-financial area. The IC-related indicators may emerge as one
of several alternatives for productivity and quality measurement.
Keywords Thailand, SouthEast Asia, Economic development, Intellectualcapital,
Industrial management, Global competitiveness
Paper type Case study
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0263-5577.htm
IMDS
112,6
866
Received 24 November 2011
Revised 29 February 2012
Accepted 29 February 2012
Industrial Management & Data
Systems
Vol. 112 No. 6, 2012
pp. 866-890
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635571211238491
I. Introduction
In the past, the main factor driving industrial competitiveness had always been tangible
and financial assets (Manasserian, 2005). During the past two decades, more attention
has been made on capital and other intangible assets such as knowledge and experiences
relating to work processes and customers (Anussornnitisarn et al., 2010). Organizational
and industrial management, including supply-chain management, can no longer focus
only on technology and machinery without strong consideration into human capital
(Chan, 2009; Ordoobadi and Wang, 2011). Consequently, innovation and creativity have
become essentially a foundation for sustaining effective value chains and industrial
competitiveness (Yound et al., 2004; Cheng et al., 2010; Dobni, 2011). Intangible assets
such as human capital have replaced tangible assets (e.g. office building , land, and
machines and equipments) when evaluating a firm’s value. In fact, the world economy
has shifted from resources- to innovation-based with the national wealth and indus trial
competitiveness derived from new ideas, creativity, innovation, and product and service
development (Cheng et al., 2010; Hervas-Oliver et al., 2011).
According to the Global Competitiveness Report (published by World Economic
Forum), there are three stages of economic development (Schwab, 2009). The first stage
is referred to as factor-driven economics which need to improve basic and social
infrastructures such as roads, hospitals, and schools. The second stage is called
efficiency-driven economies. This economy relies on workers and natural resources for
national wealth and industrial competitiveness. The key differences between the first
and second stages include more usage of technology for manufacturing and service
sectors, and higher financial and capital market capabilities. The last stage in economic
development is innovation-driven economies which rely on innovation and creativity
(e.g. new technology, product, and service development) to generate national wealth. See
Table I for a summary from Schwab (2009). It is important to note that the Southeast
Asia region, most countries are classified as either efficiency-driven (such as Thailand
and Malaysia) or factor-driven (e.g. Laos and Cambodia). Singapore is the only country
in the region which is grouped in the innovation-driven stage.
Preparing a shift in the economy stage from the efficiency- to innovation-driven
status requires massive public and private investments in higher education (Schwab,
2009; Ramoniene and Lanskoronskis, 2011). In Thailand, the reference to this third stage
has been called creative economy. This term has included on both manufacturing and
service sectors (Manasserian, 2005). For the manufacturing sector, the incentive for more
research and development (R&D), and graduating more researchers and competent
workforce have been underlined. For the service sector, medical tourism that includes
medical treatments, spa and wellness, and traditional medicines has been the driving
force in promoting creative economy. Others include the development of boutique hotels
for ecological tourism. Thailand’s Department of Industrial Work (DIW) under Ministry
Developmental stages GDP per capita (in US$)
Stage 1: factor driven ,2,000
Transition from Stages 1 to 2 2,000-3,000
Stage 2: efficiency driven 3,000-9,000
Transition from Stages 2 to 3 9,000-17,000
Stage 3: innovation driven .17,000
Table I.
Demonstration of income
thresholds for economic
development stages
IC implications
for industrial
competitiveness
867
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