Intellectual capital is the creation of more wealth by dint of knowledge and knowledge-based processes. The cycle of intellectual capital begins at inner faculties of a human being, in the application of skills, knowledge, experimentation, and research. Thus, it begins at the knowledge level in a person and ends at the creation of capital. This capital is known as intellectual capital. This chapter mainly explains the role of the elements in intellectual capital for open innovative initiatives in business enterprises. Five case illustrations are discussed in open innovation management with the elements of intellectual capital.
TopOrganizations’ Approach Towards The Innovation Process
Every firm has its own approach and method for developing new or innovative ideas. That creates value. For technology companies the innovation process is research and development activity. Service organizations on the other hand, often have a creative department. Other organizations rely on their employees in their areas to generate innovative ideas. Whatever the firms’ source of new innovations, the generic system calls this as the innovation process.
Intellectual capital includes all of the tangible resources that contribute to the creation of value for the organization. These include knowledge, competence, skills of people, working methods, processes and systems (Quinn, Anderson, & Finkelstein, 1996). It also includes the culture that supports the people, the image in the marketplace and relationships with customers, alliance with partners, and suppliers.
Brain Drain
Some of the educated and skilled professionals make international migration in search of recognition, which is referred as the brain drain. This makes a huge loss for organizations. It may be said that it is a failure of the systems in organizations to identify these human capitals and provide proper recognition. Human capital is the base of intellectual capital which is mostly not utilized or underutilized. Organized forums are to be created in the areas where there are people with knowledge gained through experience (knowledge islands) and interactions must take place in these forums. These interactions will facilitate the participants in these forums to enhance their knowledge in business (Afuah, 2009).
Concept of Intellectual Capital
Intellectual property concept extends across an entire sphere of human creations. It includes patterns, trademarks, copyrights, trade secrets, technology, digital information, designs, and databases. This list is not exhaustive. Now the term intellectual property has different connotations and is very often synonymous with intellectual capital, intellectual assets and knowledge assets (Nilsson & Ford, 2004). Intellectual capital can be thought or as the total stock of capital or knowledge based equity that a company possesses. Intellectual capital is the end result of knowledge transformation process in intellectual property of the concern (Michalisin, Smith, & Kline, 1997).