The next generation of IC measurement – the digital IC‐landscape
| Pages | 263-273 |
| Published date | 01 September 2000 |
| Date | 01 September 2000 |
| DOI | https://doi.org/10.1108/14691930010350819 |
| Author | Leif Edvinsson,Brendan Kitts,Tord Beding |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
The digital
IC-landscape
263
Journal of Intellectual Capital,
Vol. 1 No. 3, 2000, pp. 263-272.
#MCB University Press, 1469-1930
The next generation of IC
measurement ± the
digital IC-landscape
Leif Edvinsson
UNIC AB, Stockholm, Sweden
Brendan Kitts
Brandeis University, Waltham, Massachusetts, USA, and
Tord Beding
Hagatornet AB, Gothenburg, Sweden
Keywords Intellectual capital, Intangible assets
Abstract A methodology (based on multi-dimensional scaling and mathematical statistics) is
introduced that reduces the high dimensionality of ``IC-differencing components'' into a 3-D
dimensional representation ± the digital IC-landscape. Building and maintaining a digital IC-
landscape supports systematically: pedagogical display of IC complexity, migration of IC-affecting
knowledge, exploratory retrieval of high IC-efficiency, investment planning and forecasting. In
this project, 11 companies ± with a total of 20-64 ``essential variables'' and ``free parameters'' ±
have been analyzed and results of the study reported.
Introducing a ``digital IC-landscape''
Customer leveraging in co-operative environments, such as is found in cluster
models, may require non-linear, cross-linked and stepwise value calculations
often involvingparallelisms and feedbackmechanisms (see Figures 1 and 2). One
consequence is that decision making and decision support involve more and
more information.
Some traditional concepts for command and control seem to be regarded as
out-of-date. Increased (or exponential) customer leveraging requires new levels
of knowledge navigation and monitoring of critical information.
Such ``IC-differencing components'' could be compressed into an easier, more
understandable ``digital IC-landscape'' (Figures 3 and 4) with several benefits,
e.g. visibility, forecasting and IC investment planning.
A total of 11 companies with some 20-64 ``essential variables'' and ``free
parameters'' have been analyzed in this study. Two ``ever present'' decision
problems within value constellations are:
(1) ``tacit competition'' in value constellations (``thecluster paradox'');
(2) decision makers' learning and understanding of IC fitness.
The ``fitness variable'', which is discussed later, is an example of ``essentialstate
variables''. The free parameters are ``adjustable parameters'' that can be
changed through managerial intervention. For example, if we have a retail
store, some of its free parameters may include the number of trucks it uses for
transportation, employees' salaries, store assortment, pricing, even cognitive
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