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Thought Leadership


Mind over matter

Business Today, October 22, 2006
Edvinsson speak:
IC is critical to an organization’s future

In December last year, some 30 employees of Bangalore-based MindTree Consulting spent three months getting an Intellectual Capital (IC) Rating. Tangible corporate assets have been measured and assessed for many years, but it’s only now that companies have started assessing their people and their intellects. “Businesses are beginning to recognize the value of the Intellectual Capital hidden within companies,” says Leif Edvinsson, founder of Intellectual Capital, a firm specializing in this field and the man who invented the system of intellectual capital audits.

According to him, the tangible assets of any company form just 20 per cent of its value while the intangible ones (branding, people, etc,) make up an overwhelming 80 per cent. “But organisations are only just beginning to realize the value of nurturing these assets,” he says.

“Intellectual capital is the factor of production that does not show in the traditional balance sheet, but is nevertheless, critical to an organisation’s future,” explains Edvinsson. To nurture this and to encourage innovation, which is critical for survival, companies need to reorganize themselves around people and take cognizance of younger and more creative workforce. This is especially true in the Indian context,” says Edvinsson.

Companies like e4e Financial Services, Bhoruka Power & Conzerv Systems have or are in the process of getting their IC rated by Bizworth, the Indian partner of Edvinsson’s Intellectual Capital.                                                    

 RAHUL SACHITANAND    

For more information contact SR Gopalan at +91 80 41142626
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