Intellectual Capital (IC) contributes to enhance the performance of organizations and Knowledge Management (KM) plays the role of a moderator therein. The intellectual assets are developed with knowledge and learning which can add more value to the business. According to Karl M Wiig (1997), even though there are major differences between the foci and perspectives of Intellectual Capital Management (ICM) and KM, they act as fundamental building blocks in the effective management model and hence need to be closely integrated to prevent conflicts and to maximize effectiveness. In his words, ICM focuses on building and governing intellectual assets from strategic and enterprise governance perspectives with some focus on tactics, whereas KM focuses on facilitating and managing knowledge-related activities from tactical and operational perspectives. There is evidence of research works done to examine the mutual influence of ICM and KM and to study their contribution in enhancing the organizational performance.

In the paper, “The Impact of Intellectual Capital on Organizational Effectiveness:
A Comparative Study of Public and Private Sectors in India”, the authors, Tannu Verma and Santosh Dhar, attempted to examine the impact of IC and its components on organizational effectiveness of both public and private sectors in India. They studied 420 responses collected from both public and private companies in India and performed regression analysis. They used three factors of IC—Human Capital, Customer Capital and Structural Capital. It was reported that the impact of human capital on organizational effectiveness of public sector is more than that of private sector. Similar trend was observed in the case of structural capital. The authors observed that customer capital has no impact on organizational effectiveness in public sector organizations. It was reported that the impact of IC is more in public sector as compared to private sector organizations. All the three factors of IC are found impacting the effectiveness of private sector organizations and it was recommended that the private sector organizations have to focus on balanced leveraging of them. They concluded that both human capital and structural capital impact the organizational effectiveness irrespective of the variations in the sector.

IC covers the human capital, relational capital and structural capital and adds the intangible value to the business. On the other hand, creations and innovations of the mind contribute to the Intellectual Property (IP), which can be protected by the mechanisms like copyrights, patents and trademarks. Intellectual Property Rights (IPR) are the legal rights given to a person or an organization to use their own plans, ideas or designs without thinking about any competition or violation. For the long-term economic growth of a country, innovations act as principal catalysts. Since the developed countries own most of the intellectual property acquired through innovations, the developing nations usually expect to be benefitted for their development process by transfer of technology and flow of funds through Foreign Direct Investment (FDI). According to the World Bank’s Annual 2006 Global Development Finance Report, FDI has become one of the stable sources of development finance in developing countries by providing them with an opportunity to benefit from technological change.

The author, Georgios I Zekos, in the paper “Intellectual Property Rights: A Legal and Economic Investigation”, illustrated the background and developments regarding patents, copyrights and trademarks due to globalization and digital era. The paper attempts to highlight a tentative relationship between IPR protection and the distribution of FDI across jurisdictions. It focuses on examining the impact of patents, copyrights and trademarks on FDI inflows. The paper includes the legal developments to indicate their role in the protection of IPRs expressed by some indexes. The paper examined and used the national laws in force in 79 jurisdictions in ranking the various factors that are taken into account in constructing the indexes. A brief econometric analysis is included to show the significance of the indexes and prove the impact of the protection of IPRs upon attracting FDI inflows.

-- Nasina Jigeesh
Consulting Editor