engleski

Value Creation Efficiency in the New Economy

Companies that recognize the significance of Intellectual Capital as the key resource of modern business develop ways to manage and also measure it in order to find a relation between their Intellectual Capital performance and their bottom line results. But it has become obvious that the traditional financial metrics do not reflect this new reality. Why? Because not costs but value creation is the core of modern business. It is a wide spread problem that management does not really know whether value is created or destroyed since traditional indicators as revenue, cash flow or income might be misleading. It has become obvious that, if a company aims to achieve a maximum result with the existing tangible and intangible resources, management must introduce new tools for monitoring and measuring how well the resources (physical, financial and intellectual capital) have been utilized and whether they create or destroy the value. In this context the ability of employees for transforming their knowledge and skills into value creating actions is of vital importance. Therefore intellectual capital, like a new knowledge management concept for managing, measuring and improving company’ s intangible assets has become on importance. It can enable any company to launch a renewal process and transform skill and information into a powerful strategic weapon for the new century. In our research, for monitoring and measuring intellectual capital performance we suggest the usage of the Value Creation Efficiency Analysis&reg ; ; (powered by the VAIC™ model), which can bee applied at various levels of business activities: inside the company, at company level and at regional and national level. In our paper we first focus on the concept of Intellectual Capital and its consisting elements, and after that we explain the new measuring method and present case studies from Croatian Economy, where the Value Creation Efficiency Analysis (powered by VAIC™ ) has been tested.

new economy; intellectual capital; measuring business performances

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