A Consistent Assessment of Intellectual Capital in SMEs InCaS: Intellectual Capital Statement â€” Made in Europe pp427-436
Globalisation and the accompanying increasing international competition put considerable pressure on European small and medium‑sized enterprises (SME). The key to competitiveness increasingly appears to be the way people combine, master and commercialise their know‑how. Hence it is crucial for European SMEs to utilise and manage knowledge efficiently in order to obtain a competitive advantage. While different national approaches on the management of Intellectual Capital (IC) have been developed and tested, there is no European wide standard regarding the measurement of IC. The collective research project "Intellectual Capital Statement â€” Made in Europe" aims at harmonising these scattered approaches on a scientific as well as a practical level. Based on scientific consensus a first framework has been developed providing a common ground for the measurement of IC by introducing the Intellectual Capital Statement (ICS). The ICS is an instrument to assess, develop and report an organisation's IC, to monitor critical success factors systematically, and to support strategic management decisions. As InCaS puts emphasis on a practical approach suitable for SMEs, the framework is to be understood as a starting point for phase I of the project, providing the basis for further development of the method towards practicability and harmonisation. It will be expanded to the final "European ICS guideline" and supported by the "ICS toolbox" in subsequent project phases. Main focus of this paper is the InCaS project and the accompanying European approach on measuring IC. As a first result a brief overview on the existing approaches on measuring IC is provided. Furthermore, the InCaS project as well as the ICS method is described and preliminary results are discussed.
Keywords: Intellectual capital, intellectual capital statement, knowledge management, innovation, SME, european commissionresearch
To gain competitive advantage in Europe, it is vital for small and medium sized enterprises (SMEs) to utilise knowledge efficiently and to tap into full innovation potential. Reporting those intangible assets systematically to customers, partners, investors or creditors has become a critical success factor. Thus, managing "intellectual capital" (IC) becomes increasingly important for future‑oriented organisations. Conventional balance sheets and controlling instruments are not sufficient any more, because intangible assets are not considered. The collective research project "Intellectual Capital Statement â€” Made in Europe" considers national experiences and the current state‑of‑the‑art on measuring IC and will establish a European ICS guideline for implementing Intellectual Capital Statements (ICS). The ICS is an instrument to assess, develop and report an organisation's IC, to monitor critical success factors systematically, and to support strategic management decisions (cf. Mertins, Will 2007).For customers, investors and especially creditors, after receiving an ICS, one of the first things that usually comes into their mind is: Is this information "reliable"? To ensure a high quality level of ICS and to be accepted by, for instance, the financial market, it is important to have a neutral third party who certifies the reliability of the document. Learning from the experiences of ISO 9001 certification, assessment for the European Excellence Award and of financial audits, an ICS audit methodology has been developed. The ICS audit verifies the conformity with the European guideline respective ICS implementation process and the completeness of the ICS content. Furthermore, it will check whether the content is plausible, verifiable and representative for the company. To ensure sustainability, the auditor will get a picture of whether the ICS content is communicated and the stated actions for improvements are in progress or already realised. The main focus of this paper is to demonstrate how to ensure the quality and reliability of IC reporting and how to promote the sustainable realisation of actions by ICS audits.
Keywords: Intellectual capital, intellectual capital statement, quality management, audit methodology, knowledge management, SME European commissionresearch