Knowledge management, intellectual capital, structural holes, economic complexity and national prosperity
| Date | 09 October 2017 |
| DOI | https://doi.org/10.1108/JIC-07-2016-0072 |
| Published date | 09 October 2017 |
| Pages | 745-770 |
| Author | Göran Roos |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
Knowledge management,
intellectual capital, structural
holes, economic complexity and
national prosperity
Göran Roos
Intellectual Capital Services Ltd, London, UK
Abstract
Purpose –The purpose of this paper is to tie together the insights from the body of research relating to
economic complexity theory, structural holes, non-price based competition, and knowledge management.
The insights relating to generating national prosperity are synthesised through an intellectual capital lens.
Design/methodology/approach –The paper uses literature review combined with insights from an
Australian project on state-based economic complexity.
Findings –The connectivist and autopoietic epistemological paradigms are found to be most aligned with
the need to manage transformation between organisational and human resources that will achieve causal
ambiguity and hence inimitability. This inimitability forms the basis for achieving non-price based
competition and if there is a rich network of economic agents that, both individually and collectively through
collaboration, have these characteristics a large share of the economy can operate on the basis of non-priced
based competition. If all these agents have an export focus the economic complexity of the economy will be
high, and likely increasing, which will enable both the creation and the appropriation of large amounts of
value and hence result in increasing national prosperity.
Research limitations/implications –Findings are only relevant for OECD countries given the origins of
the data used.
Practical implications –Managerial implications are outlined as are major implications for public policy.
Originality/value –This is the first time that these concepts are linked.
Keywords Knowledge management, Intellectual capital, Economic complexity, National prosperity,
Non-price-based competition, Structural holes
Paper type Conceptual paper
National prosperity
Prosperity is a function of the value that an economy can both create and retain. Key drivers
of national prosperity have been argued to be well-functioning institutions (North, 1990),
good institutional infrastructure, capital accumulation, free trade, efficient markets,
personal initiative, and appropriate role for government (Smith, 1776).
Today’s economists generally point to three important characteristics influencing
growth: the extent of a country’s openness to trade and its integration with the rest of the
world; the quality of a country’s institutional infrastructure; and the success of its policy
makers in implementing the measures necessary for macroeconomic stability (Greenspan,
2002, p. 4). Additional drivers for economic growth through competitiveness are as follows:
a highly and relevantly educated labour force[1] that together with the appropriate
infrastructure can innovate and that through concentration (normally in cities) in the form of
clusters generate untradeable spillovers (Berube, 2007).
Oprescu (2012) linked national intellectual capital to national competitiveness, and
similar work aimed at linking national intellectual capital with economic growth, prosperity
and/or national competitiveness have been carried out by[2], e.g. Bontis (2004), Andriessen
and Stam (2005), Bounfour and Edvinsson (2005), Ståhle (2007), Edvinsson and Lin (2008),
Lin and Edvinsson (2010), Käpylä et al. (2012), Lazuka (2012), Salonius and Lönnqvist (2012),
Seleim and Bontis (2013), Januškaitėand Užienė(2015), and Mačerinskienėet al. (2016).
Journal of Intellectual Capital
Vol. 18 No. 4, 2017
pp. 745-770
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-07-2016-0072
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
745
Knowledge
management,
intellectual
capital
Some of the studies aim to explain the dynamics of intellectual capital at the national scale,
while others focus on how national intellectual capital can be optimised and guided to
enhance economic growth.
These approaches and studies all use an indicator-based approach towards capturing
intellectual capital, and critical questions aligned with measurement theory can be asked
around the selected indicators, e.g. is the chosen set of indicators complete? Are the
indicators distinct from each other so that no double counting takes place? Is construct
validity in place for the indicators chosen as relates to the construct that is to be captured?
And finally, is the non-additive combinatorial behaviour of the indicators captured when
they are aggregated? (For a detailed discussion of these issues see Pike and Roos, 2007).
Since many of these answers would have to be negative there are questions to be asked
around the meaning of the correlations between the intellectual capital indicators found and
the national construct studied, that is frequently found. Based on these studies and the
critique of the methodologies used it is neither possible to reject the relationship between
national intellectual capital and prosperity nor to reject that there is no relationship. It seems
likely that many of the indicators are, as far as can be judged from the published studies,
also indicators of the previously mentioned known drivers of national prosperity.
The way the concentrating and dispersing forces of economic activity change over time
impacts the benefit of proximity vs the benefit of dispersion as relates to competition for
access markets and to increasingly scarce resources which in turn impacts a nation’s ability
to capture the increasingly mobile flow of capital and people. Technological externalities
add to the concentrating forces since networks of regionally clustered businesses and
institutions provides for both the formal exchanges of knowledge through market
relationships, where proximity allows the establishment of closer ties, and the informal
exchange of knowledge in social networks of individuals (Döring and Schnellenbach, 2006).
Those beneficial aspects of close proximity which firms cannot control or achieve in any
other way than through close geographical and specialisation proximity have been named
untraded interdependencies by Storper (1995). The importance of agglomerations has found
empirical support in work by, e.g., Graham (2006, p. 26) who found that a 10 per cent
increase in the level of agglomeration is associated on average with a 1.25 per cent increase
in aggregate productivity in the UK.
Pecuniary externalities are a by-product of market interactions in imperfectly
competitive markets in the presence of market mediated linkages which has a positive
impact on the concentrating forces. The reduction in transportation costs and the
diseconomies of scales for agglomerations (e.g. disease, waste handling, crime, etc.) has also
contributed to the concentrating forces (Fujita and Thisse, 2013).
Our understanding today is not to dissimilar from the understanding articulated by
Thünen (1826) and the conclusion is that the presence of attractive, well-functioning, well
internally and externally connected large cities is an increasingly important driver for the
creation of value that underpin national prosperity. This was confirmed by some statistics
in Berube, 2007, p. 7) that show that in 2005 the 100 largest metropolitan areas in the USA
had 12 per cent of the surface area and 65 per cent of the population but: generated
recipients for 94 per cent of venture capital funding, had 81 per cent of all R&D employment,
received 80 per cent of all NIH/NSF funding, generated 78 per cent of all patents, had
76 per cent of all knowledge economy jobs, and had 75 per cent of all degree holders. Further
underpinning of this can be found in Devitt (2009) and in Naudin (2013) that estimated that
around 66 per cent of global economic activity and about 85 per cent of technological and
scientific innovation can be attributed to 40 urban mega regions.
In the intellectual capital literature, there has been several approaches to measuring the
intellectual capital of cities, e.g. Carrillo (2004), Viedma (2005), Queiroz et al. (2005),
Schiuma et al. (2008), Cabrita and Cabrita (2010), Ergazakis and Metaxiotis (2011),
746
JIC
18,4
To continue reading
Request your trial