• International Journal of Technology (IJTech)
  • Vol 11, No 8 (2020)

Assessing Intellectual Capital from the Perspective of its Rental Income Performance

Assessing Intellectual Capital from the Perspective of its Rental Income Performance

Title: Assessing Intellectual Capital from the Perspective of its Rental Income Performance
Andrey Zaytsev, Dmitriy Rodionov, Nikolay Dmitriev, Svetlana Ilchenko

Corresponding email:


Cite this article as:
Zaytsev, A., Rodionov, D., Dmitriev, N., Ilchenko, S., 2020. Assessing Intellectual Capital from the Perspective of its Rental Income Performance. International Journal of Technology. Volume 11(8), pp. 1489-1498

48
Downloads
Andrey Zaytsev Peter the Great St. Petersburg Polytechnic University, St. Petersburg, 194021, Russia
Dmitriy Rodionov Peter the Great St. Petersburg Polytechnic University, St. Petersburg, 194021, Russia
Nikolay Dmitriev Peter the Great St. Petersburg Polytechnic University, St. Petersburg, 194021, Russia
Svetlana Ilchenko Moscow Institute of Economics, Moscow, Russia
Email to Corresponding Author

Abstract
Assessing Intellectual Capital from the Perspective of its Rental Income Performance

The transformation processes in economic relations have led to the growing value of intellectual capital, which ensures strategic development of an economic entity. Intangible assets, technological and product innovations are the things that precondition the competitiveness of both the entrepreneurial sector and the national economy as a whole. Thus, it is essential to ensure that the level of intellectual capital of every individual business entity is fairly assessed. Nevertheless, so far there is no versatile method to make such an assessment, which increases the relevance of the search for new ways and their comparison with the existing ones. In this study we suggest developing a methodology for assessing intellectual capital from the perspective of its rental income performance. It is also possible to carry out a comparative analysis of the proposed method and the classical ways that are used to assess the intellectual capital of the enterprise, which include: Tobin's Q approach, market capitalization method and Pulic’s method of value added intellectual capital. These methods were tried in an industrial enterprise, operating in the mechanical engineering sector and involved in intensive innovative activities. Based on the data obtained it is possible to conclude that the authors’ approach is significant and can be compared with other methods. Assessing the intellectualization level of the enterprise makes it possible to define the strategic perspectives of its long-term development.

Intangible assets; Intellectual capital; Intellectual capital assessment; Strategic advantages; Sustainable development

Introduction

This study is aimed at developing methods for assessing the intellectual capital of an economic entity. To do so, it is suggested that the essence of intellectual capital be analyzed as well as the potential possibilities for making this assessment; the classical approaches to assessing intellectual capital be considered; the authors’ approach be proposed to carrying out the assessment of intellectual capital from the perspective of its rent income performance; the obtained approach be compared to the classical ones through testing it in an enterprise.

Scientific and technological progress in all sectors of the economy has contributed to the growing significance of intellectual capital for entrepreneurship. Today, innovative development is not possible without intangible elements, stimulating strategic competitiveness. Ubiquitous digitalization poses challenges to modern society where the main role  in economic  processes  is played by  people having specific skills,  abilities  and a

sufficient level of information. Reproducing intellectual capital is one of the main objectives when the development strategy of an enterprise is being formed (Klein, 2016; Zhilenkova et al., 2019). 

When we consider the practice of the most technically advanced countries, we see that the share of material production has been declining and giving way to the intellectual sphere for several decades already, which stimulates the reproduction of highly-qualified personnel. It can be suggested that, in the long run, it is impossible to ensure sustainable development of any economic entity and economy as a whole without intellectualization of the economy (Dal Mas, 2018; Dmitriev et al., 2020; Zaytsev et al., 2020). At the same time, conducting a fair assessment of the intellectual potential of a business entity is problematic. Comparing the outcomes of the company with the trends in its intellectual capital allows us to make conclusions about the efficiency of the company’s activities and the significance of intellectualization in achieving entrepreneurial success at this specific firm (Matos et al., 2018).
        Thus, the research in the field of intellectualization has not run its course yet, but is gathering steam instead. This study is relevant because there is a lack of a sufficient number of scientific researches on the ways used to assess intellectual capital as economic theory is continually developing.



Conclusion

        The existing approaches have some constraints, which opens up the potential for further research. In order to develop the methods, the research suggests an assessment of intellectual capital using rental approaches. The trial of our method proved its viability and its comparison with the VAIC method showed that there is relative similarity in their trends. Nevertheless, our approach can reflect greater sensitivity towards change in the enterprise performance. Thus, in cases where the rent is negative, the investments made in intellectual capital will not recuperate themselves, which is evidence of the ineffective strategic functioning of the enterprise and a signal that solutions to eliminate negative situations should be urgently explored.  
        The significance of the work done is confirmed because it is important to reveal excess profits from using intellectual resources. Thus, rental income characterizes the additional intellectual profit of the economic entity. During the time of globalization and innovative development, it is rental income that supports the strategic competitiveness of the enterprise. Assessing intellectual capital in a specific time period by revealing rent is a new, but promising area of research, which opens opportunities for lots of potential research in the future.

Acknowledgement

This research work was supported by the Academic Excellence Project 5-100 proposed by Peter the Great St. Petersburg Polytechnic University.

References

Birch, K.A., 2020. Technoscience Rent: Toward a Theory of Rentiership for Technoscientific Capitalism. Science Technology and Human Values, Volume 45(1), pp. 3–33

Ceccagnoli, M., Rothaermel, F.T., 2016. Appropriability Strategies to Capture Value from Innovation. Advances in the Study of Entrepreneurship, Innovation, and Economic Growth, Volume 26, pp. 1–31

Dachyar, M., Yadrifil, Pratama, N.R., 2015. Development of Strategy Model for Organizational Innovation through Information Systems in Higher Education in Indonesia. International Journal of Technology, Volume 6(2), pp. 284–290

Dal Mas, F., 2018. The Relationship between Intellectual Capital and Sustainability: An Analysis of Practitioner’s Thought. In: Intellectual Capital Management as a Driver of Sustainability: Perspectives for Organizations and Society, Springer, Cham, Switzerland. pp 11-24

Degtereva, V., Zaytsev, A., Kichigin, O., Dmitriev, N., 2019. Application of the Game-Theoretic Method in the Development of an Investment Behavior Strategy. In: 34th IBIMA Conference, pp. 178184

Dmitriev, N., Zaytsev, A., Dubanevich, L., 2020. Determining the Strategic Prospects of an Enterprise by Assessing the Dynamics of its Intellectual Rent. Montenegrin Journal of Economics, Volume 16(4), pp. 187–197

Drucker, P., 1993. Post-Capitalist Society. UK: Butterworth-Heinemann

Durand, C., Milberg, W., 2020. Intellectual Monopoly in Global Value Chains. Review of International Political Economy, Volume 27(2), pp. 404–429

Edvinsson, L., Malone, M., 1997. Intellectual Capital: Realizing your Company’s True Value by Finding Its Hidden Brainpower. USA: Harper Business

Galeitzke, M., Steinhofel, E., Orth, R., Kohl, H., 2015. Strategic Intellectual Capital Management as a Driver of Organisational Innovation. International Journal of Knowledge and Learning, Volume 10(2), pp. 164–181

Ikeuchi, K., 2017. Measuring Innovation in Firms. In: Competition, Innovation, and Growth in Japan. Springer, Singapore

Jona-Lasinio, C., Manzocchi, S., Meliciani, V., 2019. Knowledge Based Capital and Value Creation in Global Supply Chains. Technological Forecasting and Social Change, Volume 148. p. 119709

Jurczak, J., 2016. Intellectual Capital Risk Management for Knowledge-based Organizations. In: Risk Management in Public Administration, Raczkowski, K. (ed.), Springer, Cham, Switzerland, pp. 257–282

Klein, D.A., 2016. The Strategic Management of Intellectual Capital. UK: Taylor & Francis Group

Machlup, F., 1984. Knowledge: Its Creation, Distribution and Economic Significance, Volume III: The Economics of Information and Human Capital. USA: Princeton

Maiti, M., Krakovich, V., Shams, S., Vukovic, D., 2020. Resource-based Model for Small Innovative Enterprises. Management Decision, Volume 58(8), pp. 1525-1541

Matos, F., Vairinhos, V., Selig, P.M., Edvinsson, L., 2018. Intellectual Capital Management as a Driver of Sustainability: Perspectives for Organizations and Society. Switzerland: Springer

Mikalauskiene, A., Atkociuniene, Z., 2019. Knowledge Management Impact on Sustainable Development. Montenegrin Journal of Economics, Volume 15(4), pp. 149–160

Ngo, C.N., 2016. Developmental Rent Management Analysis: Learning, Upgrading, and Innovation. Journal of Economic Issues, Volume 50(4), pp. 1045–1068

Nikolova, L.V., Velikova, M.D., Abramchikova, N.V., 2019. The Investment Program of Industrial Enterprises under Conditions of Limited Resources. In: 33rd IBIMA Conference, pp. 5433–5445

Pulic, A., 2012. Value Creation Efficiency at National and Regional Levels: Case study-Croatia and the European Union. In: Intellectual Capital for Communities: Nations, Regions, and Cities, Bounfour, A., Edvinsson, L. (eds.), Butterworth–Heinemann, Oxford, UK, pp. 197–213

Qosasi, A., Maulina, E., Purnomo, M., Muftiadi, A., Permana, E., Febrian, F., 2019. The Impact of Information and Communication Technology Capability on the Competitive Advantage of Small Businesses. International Journal of Technology, Volume 10(1), pp. 167–177

Roth, A., 2015. Who Gets What – and Why: The New Economics of Matchmaking and Market Design – From Birth to Death and Along the Way. UK: William Collins

Roy, D., 2013. Intellectual Property Strategy for Competitive Advantage. International Journal of Intellectual Property Management, Volume 6(1–2), pp. 36–61

Schultz, T., 1981. Investing in People: The Economics of Population Quality. USA: University of California Press

Schwab, K., 2017. The Fourth Industrial Revolution. USA: Crown Business

Stewart, T., 1997. Intellectual Capital. The New Wealth of Organizations. USA: Currency Doubleday

Sveiby, K.E., 2001. A Knowledge-based Theory of the Firm to Guide in Strategy Formulation. Journal of Intellectual Capital, Volume 2(4), pp. 344–358

Tikhomirov, A., Komshilova, S., 2019. New Approach to Analyzing the Risk of Intellectual Capital in the Structure of the Market Price of Shares. IOP Conference Series: Materials Science and Engineering, Volume 497, p. 012052

Varadarajan, R., 2018. Innovation, Innovation Strategy, and Strategic Innovation. Innovation and Strategy: Review of Marketing Research, Volume 15, pp. 143-166

Vetrenko, P.P., Chernysheva, E.A., Levitina, I.Y., Voronkova, O.V., Mikheeva, D.G., 2017. Encouraging Employees to Increase the Labor Intellectualization Level as a Factor of Evolution of the Intellectual Capital. European Research Studies Journal, Volume 20(4), pp. 568–577

Woodhead, R., Berawi, M.A., 2020. Value Creation and the Pursuit of Multi Factor Productivity Improvement. International Journal of Technology, Volume 11(1), pp. 111–122

Zaytsev, A., Dmitriev, N., Talerchik, S., 2020. Intellectual Rent as a Necessary Element in the Transition to Noonomics. In: 35th IBIMA Conference, pp. 1356013570

Zhilenkova, E., Budanova, M., Bulkhov, N., Rodionov, D., 2019. Reproduction of Intellectual Capital in Innovative-Digital Economy Environment. IOP Conference Series: Materials Science and Engineering, Volume 497(1), ?. 012065