A research agenda for the management of intellectual capital

ESRC SCOTTISH DOCTORAL TRAINING CENTRE INFORMATION SCIENCE PATHWAY TRAINING 2016 12th-13th April 20156- SLIDE 1Kostagiolas , Lectures
Dr. Petros A. Kostagiolas
Assistant Professor of Information Services Management
Department of Archives, Library Science and Museology
School of Information Sciences and Informatics
Ionian University, Email. pkostagiolas@ionio.gr
ESRC SCOTTISH DOCTORAL TRAINING CENTRE
INFORMATION SCIENCE PATHWAY TRAINING 2016
12th-13th April - Room 5.B.14 – Edinburgh Napier University
Sighthill campus
A research agenda for the management of
intellectual capital
Ionian University

In composing this talk, I have drawn
material from a book I have recently
published on Intellectual Capital
Management in Libraries
Kostagiolas, P. (2012) “Managing
Intellectual Capital in Libraries:
beyond the balance sheet”, Chandos
Information Professional Series,
Oxford, U.K.
Background – Main Source of Presentation
There is NO single way forward…
but one can ARGUE that there is a
… CERTAINTY…???????

Lecture Overview
•Concepts & Implications
•Research

Need for Research: Organization for Economic
Co-operation and Development, OECD

Human Intellectual Capital by OECD

Key findings_1 of 2
• Business investment in KBC helps boost growth and productivity. Studies for
the European Union and the United States show business investment in
KBC contributing 20% to 34% of average labour productivity growth.
• KBC is transforming what makes firms competitive. For instance, in the
automotive sector, software is increasingly prominent in the cost of
developing new vehicles, with high-end vehicles relying on millions of lines
of computer code.
• Countries that invest more in KBC are also more effective in reallocating
resources to innovative firms. As a share of gross domestic product (GDP),
the United States and Sweden invest about twice as much in KBC as Italy
and Spain, and patenting firms in the United States and Sweden attract four
times as much capital as similar firms in Italy and Spain.

Key Findings_2 of 2
• Firms that are not part of a multinational group of companies – often small and young
firms – may be placed at a competitive disadvantage, relative to MNEs, in
undertaking and exploiting R&D.
• Across countries, there is a positive correlation between the market value of firms
and investment in KBC.
• Corporate financial reports provide limited information on companies’ investments in
KBC. This may hinder corporate finance and impair corporate governance.
• A fuller understanding of innovation and growth, and better policy, require better
measurement of KBC and common measurement guidelines.
• Growing business investment in KBC amplifies the importance of getting human
capital policies right. Human capital is the foundation of KBC: software, for example,
is essentially an expression of human expertise translated into code.

“the decision-making mechanisms in libraries and
other memory institutions should take into account
the value “hidden” into the intellectual capital
resources held by those organizations.”
Intellect capital provides a new source of growth
Intellectual capital can be a source for creativity and
innovation ... especially in a period of economic crisis
Departure Hypothesis

• Intellectual capital is fostering innovation and is an
important value creator.
• New resources are constantly required since the
library business environment is becoming more and
more complicated and knowledge based.
• Investments in intellectual capital are either mis-
measured or not measured at all.
• Society and Economy is changing rapidly...
Departure Assumptions

Our world is changing…
we need a way to move forward…

Resources become scarce…
• Global Economic Crisis creates a burning platform for our
socioeconomic structures… we need to learn and move forward!
• We need to depart from status quo… and endorse the process of
CHANGE…
• We need new sources for growth: Intellectual Capital
The global economic
crisis is changing our
lives and the
management of
Information Services!

• The deeper is the economic crisis the fewer are the information
services provided; but the demand for such services increases.
• Fiscal crisis dramatically reduces public funding, and reduces the
ability of the private sector to contribute...
• Competition for the scarce tangible resources is increasing.
• Non-for Profit initiatives increasing.
• The sustainability of libraries is judged solely upon economic criteria
... disregarding in many cases the social capital creation and role.
Intellectual Capital versus Economic Crisis

• Prosperity from mid-20th century and until the economic crisis of
2008 …
• Expansion of existing libraries
• Development of new libraries
• Digitization and new library-programs
• Number of users increased
• Library Science has been established as a university discipline.
• Over all these years libraries in Greece remained highly dependent
upon the state funding and (unfortunately) the BUREAUCRACY
INCREASED…
• Economic crisis consequences are increasing year after year…
An example: The impact of the economic
crisis on libraries in Greece

Intellectual capital management as a novel
management philosophy …
https://www.youtube.com/watch?v=3Jk6clmMycI
Jason Clarke - Embracing Change
https://www.youtube.com/watch?v=vPhM8lxibSU

The term Intellectual (or Knowledge) Capital has
received different interpretations according to the
different academic disciplines, i.e. accounting,
economics, law, management etc.
Three terms are widely used:
 Intangible Assets — in accounting literature,
 Knowledge Capital — by economists,
 Intellectual Capital — in management and law.
Equivalent interpretations of
Intellectual Capital

An omnibus definition is
the “totality of
intangible/knowledge
assets/resources held
by an organization
that are amassed
over time, not
included in the
balance sheet and
identified and
analyzed
distinctively.”
A definition for Intellectual Capital
Intellectual capital has always been present in
libraries ...

Infrastructure, processes and
systems of a library that
enable the work of the
human capital as well as the
organizational philosophy
and structure; management
systems and other
information systems; patents;
copyrights etc;
Knowledge that remain
within the library at the end
of the working day.
Resources linked to the
external environment of the
library.
Library networks;
Library’s reputation –
goodwill;
User loyalty
Human Capital Organizational Capital Relational Capital
Intellectual Capital Categories
Includes the knowledge,
experiences, competencies and
creativity of the staff;
Knowledge that employees
take with them when they
leave the library;
It is the knowledge in peoples’
minds, is a totally portable
resource and an enormous
capital asset.

1
8
Categories
of Intellectual
Capital
Indicative Intangible Assets/Resources
Human Capital
Staff training / education
Staff quality / competence / skills
/ experiences / talents
Attributes
Learning culture
Innovation culture
Structural or
Organization
Capital,
Contracts
copyrights
Digitized collections
Access policies
Quality and safety systems
Accreditation/certifications
Branding
Knowledge based teams
Staff Information
Remote services
Repository
Archive
Systems for
network
development
Website
Security
Relational Capital
Relationship with stakeholders
Networking and cooperation
Participation in innovation
networks;
Personnel networks
Professional Networks
Users’ Trust/
loyalty
User training

Intellectual Capital Management (IC Management) is defined as the deployment and
management of intellectual capital resources and their transformations (into intellectual
capital resources or into traditional capital resources) to maximize library’s value
creation in the eyes of its stakeholders.
Defining Intellectual Capital Management
in Libraries

• Users – Society
• Other organizations – economy
• Employees – Volunteers
• Information material/ collections
• Partners & competitors
• Processes for library operations
• Information Services
• Information Technologies
Desired “Value(s)” and “Impact” need to be
agreed among the stakeholders!
These concepts are often subjective, difficult
to measure and often “lie in the eye of the
beholder”!
Inspiration drivers for investing on IC
Value & Impact Drivers
http://www.jackson-pollock.org/number-18.jsp
https://en.wikipedia.org/wiki/Aristotle_with_a_
Bust_of_Homer#/media/File:Rembrandt_Harm
ensz._van_Rijn_013.jpg

-2-
Measurement
-1- Identification -3- Action
Intellectual Capital investment criteria:
• Valuable
• Durable
• Scarce
• Inimitable
• Unsubstitutable
The three steps of IC Management

• Capturing persons’ “talents” and skills for specialized services;
• Information distribution agreements;
• Insurance contracts;
• Service level agreements with suppliers and/or specific groups of users
(user and subscription rights;);
• License rights for the protection of intellectual property;
• Branch contracts for services provision “outside” the main library
infrastructure.
Examples of Intellectual Capital resources
that are expressed through contracts

Valuation versus Measurements and Metrics

Human Capital
• Team development
• Motivation index
• Flexibility index
• Experience & training
Structural Capital
• Usage of Library Systems & Usage of
WEB 2.0 Services
• Value of Library Collection
• Leadership index
• Flexible practices
• General culture of the library
• Management systems (business plans,
quality certification)
• Information literacy
24
Indicative Intellectual Capital Metrics
for Libraries
Relational Capital
 Loyalty and trust
 Agreements/ contracts with external
parties
 Reputation/ Fame
 Brand name

ESRC SCOTTISH DOCTORAL TRAINING CENTRE INFORMATION SCIENCE PATHWAY TRAINING 2016 12th-13th April 20156- SLIDE 25Kostagiolas , Lectures25
A Methodology for developing a hierarchy of
Intellectual Capital Resources
Research Goal: A
hierarchy among the three
IC categories in terms of
their contributions in
improving library
performance.

Developing a hierarchy of Intellectual Capital
Resources in terms of their contributions

ESRC SCOTTISH DOCTORAL TRAINING CENTRE INFORMATION SCIENCE PATHWAY TRAINING 2016 12th-13th April 20156- SLIDE 27Kostagiolas , Lectures27
Developing a reporting model for Intellectual
Capital Resources in Libraries

a. How influential is a given intangible resource upon the
library’s ability to create value?
b. What is the level of quality held by the intangible resource
as compared to the ideal intangible resource quality?
c. What is the quantity of intangible resources that the library
should acquire, as compared to an ideal situation?
d. How the reliability/ durability of a specific intellectual
capital resource can be measured and impact on future
utilization?
IC Management “questions” …!!

• Like every innovative concept, intellectual capital
has created dilemmas and uncertainties, since we
can only approximate the degree to which we gain
advantage from any intellectual capital
management activity.
• The prevailing library management paradigms do
not appropriately handle the entire significance of
knowledge assets/resources as value and impact
creators; while professionals must be properly
skilled for knowledge capital management
techniques.
• Further research results of practical and theoretical
nature are required allowing the decision making
mechanisms of libraries to identify and manage its
core intangible recourses.
Summary – Final Thoughts

Development of IC reporting scheme and
an online IC dashboard & resource center

Thank you
pkostagiolas@ionio.gr
“not everything worth knowing can be counted precisely and reduced to a rank,
percentage or ratio; many aspects of information service are intangible, and
must be evaluated in other ways” (Hernon & Altman, 2010, 50)

A research agenda for the management of intellectual capital

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