1. Introduction to SPICE courseware
What is SPICE?
SPICE is an acronym for:
Sustainable Programme on Intellectual Capital Education
Developed by Inholland University

2. History of Asia-Link Programme
2-year project by Inholland University
30 ECTS curriculum to prepare undergraduate students, teaching staff and executives and middle managers in industry, for the knowledge economy
Introduces Intellectual Capital as a new subject field into curricula of partner institutions in Asia and Europe and its stakeholders in industry
Innovate undergraduate curricula of departments in business, communication, finances, and ICT into the direction of the knowledge economy and its new business values

3. SPICE courseware
Deploys the following instruments to achieve its goals:
Key Course Texts on Intellectual Capital
An online case-database with industry-based case-studies and best-practices Intellectual Capital in context (Europe and Asia)
A train-the-trainer programme to facilitate future dissemination of the outcomes of the project

4. Focus of SPICE
Describes the intangible drivers (competences, knowledge-ability, efficiency, management concepts, innovation, communities of practice and similar concepts) in their relationship to European and Asian business cultures
Web-based platform creates forum for discussion and a place for publication of new knowledge about the nature of industry and organizations in the knowledge economy in Asia and Europe
TEPEK to take core principles of SPICE and connect educators and business organisations around a new body of knowledge regarding the needs of the knowledge economy

5. Different theories on competitive advantage
Past decade saw a knowledge-based view of companies
Based on assumption that firm-specific knowledge now the most important source of sustainable competitive advantage
Theories include:
1. Industry-based view
2. Resource-based view
3. Knowledge-based view

6. Industry based view
Uses external (competitors, suppliers, customers) as starting point for strategy development
Five-forces model can identify features that determine nature of competition in a particular industry:
1 Rivalry between established competitors
2 Bargaining power of buyers
Bargaining power of suppliers
Enter a market
Substitute products

7. Resource-based view
Based on assumption that firm-specific competencies have become most important source of sustainable competitive advantage
Today’s competitive environment characterized by dynamic changing markets and fast changing customer demands
Core competencies are those distinctive skills and capabilities which taken together represent the firm’s ability to do business better than its competitors

8. Knowledge-based view
Increasingly,it is claimed that knowledge is the most important resource
Resource-based view only implicitly refers to knowledge, whereas knowledge-based view elaborates on the nature and definition of knowledge and the way it should be managed
Resource-based view + knowledge-based view = intangible-based view

9. Intellectual Capital
Intellectual Capital: a new perspective on value creation
Reasons for this:
1 Dissatisfaction with the 500 year old accounting system
2 Increasing difference between market- and book value. Huge rise of stock prices, marginalization of explanatory power of traditional balance sheet
Effect of globalization and increasing need for transparency in business reporting. An attempt to build a standardized performance framework

10. ICT on the increase
The Y2K-problem and the introduction of the Euro forced many companies to invest heavily in ICT-infrastructure
Intellectual Capital and other reporting initiatives an intelligent way of exploiting the new ICT infrastructure
Intellectual Capital explicitly focuses on intangible resources
Focus on core competences and those resources considered most important for creating competitive advantage

11. Monitoring intangible resources
Traditional bookkeeping system does not monitor these resources
Value and performance of intangibles not defined, leading to:
Poor valuation (external communication problem)
Poor usage (internal management problem)
Systematic and standardized reporting about intangibles will lead to better organizational performance

12. Defining IC Core elements of agreement: 1 IC is about intangibles
2 IC makes the difference
3 IC gives structure to organizational resources
4 IC is about human- and non-human resources
“All intangible resources that are available to an organization, that give a relative advantage, and which in combination are able to produce future benefits”

13. The invisible balance sheet
Sweiby 1997, Intangible Assets Monitor (IAM), three different kinds of intangibles:
Individuals Competence - skills, education, experience and employee attitude
Internal Structure - patents, concepts, models, and computer and administrative systems
External Structure - relationships with customers and suppliers. Also brand names, trademarks, and the company’s reputation or image

14. Celemi
Since 1995 Swedish consultancy Celemi has published an IAM as part of their financial report
Celemi`s 'Invisible' Balance Sheet contains intangible assets classified under three main headings:
Our Customers
Our Organization
Our People
Celemi´s Invisible balance sheet is much larger than the ‘visible’ one
Source: Celemi Annual Report 1995

15. Comparison of intellectual capital models (Stam, 1999, 2001).
Intangible Assets Monitor (Sveiby)
Skandia Navigator
(Edvinsson)
Intellectual Capital Index
(Roos)
Human Resources
Individual’s competences
Human Capital
Organizational
Resources
Internal Structure
Process Capital
Infrastructure Capital
Relational
External structure
Customer Capital
Relationship Capital

16. IC Models
IC is the product of interaction of these three different classes of intangibles:
Human resources, organizational resources and relational resources (Roos, 2003)
This classification used as a starting point for reporting and communicating about IC
Distinction between human capital, structural capital and relational capital

17. Intellectual Capital Monitor
Each of the three classes of IC should be monitored from three different perspectives:
Assets (present). Gives an indication of the present power of an organization. Provides an overview of the current main assets
Investments (future). Gives insight into the future power of an organization
Effects (past). Shows the extent to which the organization has made its intangibles productive during the past period

18. Intellectual Capital Monitor (Andriessen & Stam, 2004
Human capital
Structural capital
Relational capital
Assets
Investments
Effects

19. Indicators Measuring IC is about indicators:
“A reasonable trustworthy estimation of an unknown value”
Not objective truths
A signal for attracting attention
Aid in monitoring progress and success of management initiatives
Serve as input for the management decision process

20. IC Report
A well designed IC report consists of a balanced combination of indicators
Can be quantitative, but also qualitative
Can be expressed in numbers, percentages or monetary value
Can be presented in figures, words, colours, smileys or dashboards
Should be SMART
Should also be stimulating

21. Time investment Value of measurement increases over the years
Organizations that decide to measure IC should be willing to invest at least three years
Need to practice working with indicators
Supplement traditional reporting methods
Adapt a different perspective on value creation

22. Reasons for reporting on IC
Three main categories:
Improving internal management
Improving external communication
Statutory and transactional issues

23. Challenges
Wide variety of problems related to measuring and managing intangibles means a variety of solutions
Improving the management of intangible resources in itself does not justify the measurement
Gap between market and book value is in itself not enough reason to start measuring intangibles
If measuring is the best solution to our problem, should be aware of the problem we are trying to solve, so that can choose the appropriate method

24. Further reading All the SPICE courseware texts covering:
The Knowledge-based economy
The IC perspective
Measurement
Intellectual Property
Creating value with IC
Managing human capital
Managing business processes
Managing brands and networks
Integration path