Role Of Intellectual Capital In Innovation

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1. Introduction This opinion paper is on the contribution of intellectual capital to innovation, strategic value creation and knowledge sharing in an organisation. The paper first looks at defining intellectual capital and intellectual capital as the primary driver of a company’s performance. Thereafter the paper looks at the role of intellectual capital in innovation by discussing the intellectual capital components namely; human capital, structural capital, relational capital and spiritual capital. Finally, the strategic value creation by intellectual capital is discussed with examples relating to organisations. In conclusion, the paper covers knowledge sharing and how it can be used to develop intellectual capital in a company. 2. Defining…show more content…
• Better Decision Making – Having access to structural capital allows key decision makers to make informed decisions based on the company’s intellectual capital. • Improved Operations – Companies can radically improve their operations through the utilisation of human capital at their disposal. • Relationship Management – Improved relations with customers and suppliers are just some of the benefits to using company intellectual capital. • Driving Change – The adoption of improved ways of running key business functions can also benefit an organisation by increasing efficiency. 4. Role of Intellectual Capital in Innovation Innovation is an important driver of business growth and it also enables a company to offer products at competitive prices in better quality. The improved prices and quality contributes to the competitive advantage and gaining a bigger share in the market. Innovation does not only create a competitive advantage but also collaborative advantage within the organisation. Below are possible innovations that can come from organisations using intellectual…show more content…
Knowledge Sharing in Developing Intellectual Capital The Intellectual capital in an organisation would determine its success if it is well managed. Having knowledge sharing allows the organisation to have a common platform to further enhance operations and productivity. Knowledge sharing allows the possibility for solving problems through expertise which may not be available in the organization. Knowledge sharing is influenced by different factors depending on what the organisation wants to achieve and what infrastructure is in place to support knowledge sharing. A firm generates value from what it knows through the organisational processes of knowledge creation, knowledge transfer and knowledge utilisation. Tacit knowledge plays a crucial role in knowledge creation; codified or explicit knowledge facilitates knowledge transfer; “common” knowledge or shared understanding about goals and purpose guides knowledge utilization. Over time, a firm accumulates a stock of knowledge and capabilities that is unique to its learning and experience. This stock is the firm‟s intellectual capital and it comprises human, structural and relational capital that resides in employees, organisational routines, intellectual property, and relationships with customers, suppliers, distributors and partners (Choo & Bontis,2002,

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