The nature and role of IC: Rethinking the process of value creation and sustained enterprise growth
Current formulations of the concept of intellectual capital (IC) are seen as flawed. They equate IC with intangible assets and intellectual property, or, with knowledge management (KM) activities. They also do not explain its genesis and development. IC is here conceptualised as the holistic and superordinate capability of an enterprise to create value through a creative orchestration of its knowledge resources, under conditions of constant change. It is the result of the dense dynamic nexus of a firm's social capital (SC), human capital (HC), and KM. It is manifested in the form of a firm's sustained profitable growth. It, thus, also represents a firm's overarching capability to meet challenges and exploit opportunities in its continual efforts to generate wealth. The essence of the concept is seen to lie in Ashby's Law of Requisite Variety. Requirements for its development toward sustained value creation and growth of enterprises are outlined briefly.