Visualising the Hidden Value of Higher Education Institutions: How to Manage Intangibles in Knowledge-Intensive Organisations

Visualising the Hidden Value of Higher Education Institutions: How to Manage Intangibles in Knowledge-Intensive Organisations

Susana Elena-Pérez (Institute for Prospective Technological Studies (IPTS) - Joint Research Centre, Spain) and Campbell Warden (University of La Laguna, Spain)
DOI: 10.4018/978-1-60960-054-9.ch009
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European universities are immersed in an intensive transformation process to order to transform themselves into more autonomous and competitive organisations. Adapting to the new demands implies the introduction of management systems, traditionally used by firms, in order to govern universities according to criteria of efficiency and effectiveness. In recent years, the idea of managing and reporting on intangibles and Intellectual Capital in universities has been acquiring progressive importance in Europe. The Chapter provides a comparative analysis of the most significant European experiences in managing and reporting Intellectual Capital in higher education institutions addressing two main issues: the identification of the benefits and obstacles of implementing IC frameworks in these particular institutions and reflect on the necessary degree of standardisation of indicators to allow comparability. To this purpose, three types of initiatives are analysed: the case of Austrian universities, which are compelled by law to report annually on their IC; five initiatives developed by individual institutions on a voluntary basis, and an attempt to build a homogeneous IC framework for European universities.
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In the knowledge-based economy, intangible assets and investments are seen as key drivers in the value creation processes in companies and, hence, in economic growth. Since the second half of the 20th century the main economic and strategic management theories have recognised, in one way or another, the importance of intangible elements as part of the economic growth (Solow, 1957; Shultz, 1961; Denison, 1962; Arrow, 1962; Kendrick, 1974; Becker, 1975; Nelson & Winter, 1982; Nonaka & Takeuchi, 1995; Gorey & Dobat, 1996; OECD, 1996; Freeman & Soete, 1997; European Commission, 2000).

New ideas about managing and reporting on intangibles and IC have been acquiring progressive importance, not only among academics but also among governments, regulators, enterprises, investors and other stakeholders, which has been reflected in the variety of guidelines and reference documents: MERITUM Guidelines (2002) 1, Danish Guidelines (2003)2Japanese Guidelines (2004) 3, Australian Guiding Principles (2005) 4 and RICARDIS (2006) 5, the InCaS (Intellectual Capital Statement for Europe) Project (2007)6 .

Although most of the analysis on identifying, measuring and reporting on intangibles and IC refers to firms, during the last two decades the interest has extended from private organisations to public ones, such as hospitals (Vagnoni & Castelleni, 2005; Habersam & Piber, 2003), cultural organisations (Donato, 2005), local governments, cities and nations (Viedma, 2003; Pasher, 1999; Remble, 1999; Bontis, 2004; Andriessen & Stam, 2004) and universities and research centres (Sánchez & Elena, 2006; Sánchez et al., 2006a,b and c).

These latter institutions are the main focus of this Chapter since they are particularly active in implementing IC approaches because their main goals (production and dissemination of knowledge) and inputs (human resources) are intangibles. Higher Education Institutions (HEIs) exist to create and share knowledge. However, few of these organisations have institutionalized processes that leverage knowledge to spur innovation or maximize operational efficiency and effectiveness. In many HEIs there is no organized knowledge system, or even understanding of this kind of system. Such an oversight is striking.

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