It was on 21 May 2008 that the Université Paris-Sud officially launched the first European Chair on Intellectual Capital Management in partnership with Bouygues Telecom, the CIGREF corporate network, the EADS Corporate Foundation, INPI (the French Patent Office), the OECD, the European Patents Office and the World Bank.
The purpose of this Chair is to contribute to the sharing of knowledge and the development of research capabilities through the creation of an international forum for discussion, education and research supported essentially by the research resources of the Université Paris-Sud, its international reputation and its ability to attract researchers of national and international status. The Chair is coordinated by Professor Ahmed Bounfour, the Chairholder and Scientific Coordinator of the World Conference on Intellectual Capital for Communities (hosted jointly with the World Bank) since 2005. This Chair confirms the intense partnership formed between the university, public institutions and private companies to examine issues of central economic concern.
Inaugural address by Ahmed Bounfour
“Vice-Chancellor, ladies, gentlemen, esteemed colleagues and dear friends
As the Vice-Chancellor of our university has just underlined, intellectual capital is an essential resource for the development of organisations. Strictly speaking, it is certainly not a new topic, since economic theory and organisational theory have long considered its implications. However, important developments are now giving this topic a compelling relevance in terms both of research and action.
Managing intellectual capital requires a profound sea change in the thought processes and action methodologies of managers and public policymakers. In most instances, intellectual capital is an invisible resource, but one that is nevertheless ubiquitous in socio-economic systems. Initially, our thoughts turn naturally to intellectual property rights in the form of patents, designs, models, brands or software. But intellectual capital also includes a number of other often underestimated factors, such as organisational processes, technological infrastructures, information systems, reputation, relationship assets and, of course, the tacit knowledge held in the brains of every employee of any company or organisation. In that knowledge, we then begin to grasp the full extent of this field and the difficulties involved in any exercise that attempts to model or create value from it, especially since these factors are characterised by great volatility: unlike tangible assets, intellectual capital resources create no value unless combined with each other or with tangible resources.
In theoretical terms, and without wishing to delve back into the origins of economic theory and its twin sister organisational theory, what we have today is a collection of interesting and stimulating theories. This combination should enable us to gain a new perspective on the issue of intellectual capital in organisations and, where appropriate, to respond to the concerns of managers. These include resource theory and dynamic capability theory as applied to strategy, of course, but also evolutionary theory, transaction costs theory and anthropological theories, for example. Even so, do we have a real, well-articulated general theory of intellectual capital capable of providing clear responses to the urgent issues we now face? Nothing could be less certain.
Our vision of the company value creation model must be fundamentally revised in today’s environment where – given the importance of networks – interstices are becoming true points of value creation. Just as company stakeholders are suffering from a very real asymmetry of information, chief amongst which – as the work of Lev has shown – are the financial markets. But our teaching and, more generally, our thought processes, are still fundamentally characterised by unitary reason: the company with its emblematic reporting instruments – the balance sheet and profit and loss account – and, more generally, the organisation, which is seen as the basic unit of analysis, even if the way it interacts with its environment is taken into account. The same problem arises at the macroeconomic level, with all the issues involved in incorporating intellectual capital into the measurement of GDP and beyond.
Furthermore, the question of intellectual capital must also be considered from a systemic perspective, because it concerns not only companies (and not only those with market listings), but also public assets and processes: not only those of nation states, but also those of regions, cities and any non-commercial organisation, as well as research centres and universities.
Socio-economic models are also undergoing profound change on a scale that is often underestimated. The issue of intellectual capital cannot be considered seriously without taking account of the organisational methods that underlie the new capitalism. The question of knowledge within the organisation is now widely debated in economic and management literature. Nevertheless, we don’t really have any clearly established models and theories, or perhaps it would be more accurate to say that our current visions do not take sufficient account of emerging socio-economic models. The fact is that the issue of knowledge cannot be seriously considered without taking account of the new rules that underlie the new capitalism: a cognitive capitalism, undoubtedly, but a capitalism whose previously dominant implicit order – the unitary hierarchical company – is in the process of change. More specifically, it is useful to highlight how emerging organisational methods (the network, the community and the solo individual) will encourage the emergence of new forms of intellectual assets to be modelled, to be used for value creation and to be managed: idiosyncratic individual assets, as well as assets of recognition within the community framework (restricted communities, quasi-organic communities and organic communities) will naturally play an increasingly important role in the context of value creation.
At the institutional level, the Lisbon Agenda set out a strategic goal for Europe: to become the most competitive knowledge-based economy in the world by 2010. But whatever its shortcomings, the Lisbon Agenda contains one particularly relevant key element, which is to consider knowledge – and its associated assets – as a key resource whose deployment plays a decisive role in ensuring that the continent achieves a sufficient level of development compatible with the conditions of international competition, and with the social cohesion goal set by the same Agenda.
In this context, and in operational terms, the issue of intellectual capital takes on a new depth. It becomes the core of a collective mechanism for managing a key resource with the prospect of achieving harmonious development of collective action within a socio-economic system that rotates around the ‘triple helix’, which, as we know, is supposed to incorporate the articulated interaction of three major actors: universities, companies (and their networks), and public policymakers (national, regional and local).
It is around this perspective that genuine action to generate value from the intellectual capital of structured communities can judiciously be assured. It is this perspective that we see as best suited to the knowledge economy, and around which the effectiveness of public initiatives – especially in France – should be evaluated.
The development of intellectual capital in France, and the generation of value from it, cannot be structured satisfactorily unless the university is the core of the triple helix structure. Behind this lie all the issues surrounding the performance of socio-economic systems, and their re-evaluation in terms both of analysis and action.
Lastly, the approaching competitive battle between companies, nation states, regions, cities and universities will be fought essentially on the battlefield of investment and the quality of intellectual capital resources. This is the reason why many countries have already put in place programmes – and particularly microeconomic programmes – intended to extract greater value from intellectual capital. In Europe, this is true of the Scandinavian countries – especially Denmark, Finland and Sweden – and, more recently, Austria and Germany. In 2001, Denmark adopted legislation that encourages companies to disseminate information about intellectual capital assets (those seen as particularly relevant). In Germany, a reporting programme targeting SMEs has also been introduced by the Federal Ministry for the Economy. This programme has already been up-and-running for more than two years now.
In Japan, and Asia generally, there is a very high level of interest in this subject. The METI has implemented its own three-level value generation programme: the company level for industrial property and intellectual capital in the wider sense; the regional and city level; and more recently, the macroeconomic level, with an evaluation study carried out by the RIETI (on behalf of the METI) and the OECD .
China and India are no exception, and many universities are allocating significant resources to integrating pure intellectual capital into the performance analysis of companies in socio-economic systems.
Brazil, thanks to a programme run by the BNDES, a major development bank represented here today by Eduardo Rath, one of its Vice-Presidents, is seeking to refocus part of its $20 billion annual investment programme on generating value from the intellectual capital of Brazilian companies.
Closer to home, the Mediterranean countries, including those of North Africa and the Eastern Mediterranean, are striving to develop strategies built on knowledge and its associated assets by leveraging their oil resources and, more importantly, the young age profile of their populations.
Against this background, France has been something of a pioneer, beginning as early as the start of the 1980s with a number of Plan reports, a report by the Crédit National on behalf of the OECD in 1987, and a series of reports by the Conseil Economique et Social. But management practice has not really followed. Recent trends suggest that this topic is now returning to the centre of the agenda in terms of political and management action plans, notably with the creation of the APIE – Agence du Patrimoine Immatériel de l’Etat – in 2007, which is a world first, and the development of multiple initiatives in conjunction with business associations, led by the CIGREF and MEDEF. Real interaction and articulation between companies, public institutions and universities around this issue is becoming possible: it is now within our reach.
The intention of this mini-safari has been to outline the extent of the field and the scale of the paradigm revolution to come. The purpose of the programme set out by the proposed Chair is to help in that process. In practical terms, it is within this context that the project will evolve, with the principal ambition of contributing to a constantly renewed stream of thought and action.
Thank you for your attention.”