KnowKapital

Measuring the National Intellectual Capital in the XXI Century

This is a new method for National Intellectual Capital measurement. "Measuring the National Intellectual Capital in the XXI Century", was proposed in a World Bank wite paper "Where Is The Wealth of Nations?" World Bank, Washington, DC. This evaluation model separates the wealth of nations into three categories:

 

  • Natural capital that exists in a particular country;
  • Produced capital that has been created over the years by humans who inhabited this area of the planet;
  • Intangible capital that includes labor, human capital, social capital, and other production factors such as the quality of institutions. Intangible Capital thus results from several factors such as skills and know-how of the people of that country, also includes social capital, ie trust among people in a society and their ability to work together for a common purpose. Also takes into account aspects of governance that enhance labor productivity. For example, if an economy has an efficient judicial system, clear property rights and effective government, those effects result in more intangible wealth.

 

We recommend the reading of this paper. You will certainly be surprised to know that the overall intangible capital in all countries studied is more than the sum of Natural Capital and Capital Produced. According to this paper, the total wealth includes:

 

  • Natural Capital (26%);
  • Produced Capital (16%);
  • Intangible Capital (58%).

 

Estimates of total wealth reported in the paper are built upon a combination of approaches top-down and bottom-up. The total wealth, according to economic theory, is estimated as the present value of future consumption. The stock of produced capital is obtained from historical investment data using a perpetual inventory model (PIM). The values of natural wealth are based on national data on physical stocks and estimates of revenues from natural resources based on world prices and local costs. Intangible Capital, then, is measured as the difference between total wealth and other stocks of produced capital and natural.