1. Quaid-i-Azam University, Islamabad, Pakistan; mrs.jabeen2019@gmail.com
2. Quaid-i-Azam University, Islamabad, Pakistan; huma1102@gmail.com
3. Quaid-i-Azam University, Islamabad, Pakistan; khansahib@gmail.com

*             Correspondence: mrs.jabeen2019@gmail.com

Keywords: Intellectual Capital, Economic Growth, Global Competitiveness Report, Asian Countries

1. INTRODUCTION

Economic development is defined as the increase in a country’s GDP; however, it may also be defined as the increase in a country’s revenue, output, and expenditure. Consumption of products and services rises because of economic expansion, raising the standard of living. People began to be concerned about economic advancement after World War II [1]. After the European era, several former colonies and low-income countries were called underdeveloped countries to distinguish them from industrialized countries [2]. When an impoverished country’s level of living rises, it is classified as a developing country. Developing countries are identified by per capita income, while development is defined by per capita income increase. The best predictor of a country’s economic success and well-being is its per capita income. (Economic Development | Britannica) [3]. Policymakers’ most important responsibility is to improve inhabitants’ quality of life. To put it another way, intangibles are an important source of economic growth, happiness, and wealth creation. The intellectual capital and competitiveness of a country are the consequence of the country’s knowledge and are intertwined [4]. In spite of the many results, the positive relationship between intellectual capital and financial performance is indicated by [5]. In every knowledge-based economy, intellectual capital is a vital source of company development, innovation, and competitive advantage [6]. The European Union has also identified intellectual capital and innovation as the primary drivers of future country and corporate development, as well as individual advancement. Different types and approaches to intellectual capital have been described in recent years [7], but national intellectual capital was first identified in 1996. The Swedish government employed Leif Edvinsson’s Skandia navigation model to investigate the country’s hidden wealth in 1996, resulting in the report Welfare and Security [8]. Mashlup created the phrase intellectual capital in 1962, emphasizing the need for general knowledge for a country’s development and prosperity. A study stated that “IC is more than pure intellect; it also includes “intellectual action.”. It is the move from having knowledge and skills to using the knowledge and skills” [9]. A recent study emphasizes that IC lies with skilled employees only who have a strong commitment to the goals of a business [10]. The IC is a company’s overall and meta capacity to seize opportunities and meet difficulties. On the other hand, saw IC as a source of organization-wide information that enables organizations to act [11].

2. LITERATURE REVIEW

The term work-life balance is a way of dealing with the stress which arises as people try to juggle the different aspects. The rise in a country’s Gross Domestic Product (GDP) is one definition of economic development. However, economic development can also be defined as a country’s revenue, output, and expenditure rise. Because of the economy’s expansion, more goods and services are purchased, contributing to an increase in the general living level. After the end of World War II, individuals started becoming concerned about their economic future. Following the end of the European era, several countries that had formerly been colonies and had low incomes were referred to as underdeveloped countries to differentiate them from industrialized countries. When a previously underdeveloped nation begins to experience improved living standards, it is referred to as a developing nation. Countries not considered to be developed classified according to their per capita income, while development is defined as an increase in per capita income. The average income of the population in a country is the most accurate indicator of that nation’s overall economic health and prosperity. (Economic Development | Britannica). Residents’ quality of life should be the primary focus of policymakers as their primary responsibility. In other words, intangible assets significantly contribute to economic expansion, personal happiness, and wealth accumulation. A country’s intellectual capital and level of competitiveness are intertwined and are the direct result of the country’s level of knowledge. Despite the many influences, there appears to be a positive correlation between intellectual capital and financial performance. Intellectual capital is essential for business growth, introducing new products and services, and maintaining competitive advantage in knowledge-based economies. The European Union believes intellectual capital and innovation will be the primary drivers of future individual advancement and future country and corporate development. In recent years, various approaches and types of intellectual capital have been described; however, the concept of national intellectual capital wasn’t recognized for the first time until 1996. In 1996, the Swedish government investigated the country’s secret wealth using the Skandia navigation model developed by Leif Edvinsson. This effort resulted in the report titled Welfare and Security. In 1962, Mashlup coined the term “intellectual capital” to emphasize the significance of a population’s general knowledge level to a nation’s growth and prosperity. According to one piece of research, “intellectual capital” refers to more than just raw intelligence; it also encompasses “intellectual action.” The transition from knowing something and being able to do something to doing something with that knowledge and those skills” [9]. Recent research [10] highlights that skilled employees who have a solid commitment to the goals of an organization are the only ones who can provide IC. A company’s overall and meta capacity to seize opportunities and overcome challenges is known as its innovation capacity (IC). On the other hand, IC is a source of organization-wide information that enables organizations to act and use this information to make decisions. The acronym KAM stands for Knowledge Assessment Methodology. It is a technology based on the internet that allows users to access a country or region for the knowledge economy. OECD, help to determine the relationship between gross and net capital stocks by defining the various concepts for measuring capital services and providing assistance in doing so. ECE stands for the Economic Commission for Europe. The Economic Commission for Europe of the United Nations (ECE) has developed a model to promote innovation, evaluate already established practices, and commercialize knowledge assets. Accounting for Human Resources (also known as HRA), this approach considers individuals as potential assets. It has significant repercussions for the finances of the outside world. It helps assist with the evaluation of human resources. Economic Value-Added (EVA), this strategy is implemented by a wide range of economies and is built on four pillars. There are 14 standard variables; two of them are performance indicators, and the remaining 12 are knowledge variables. In Balanced Scorecard (also known as BSC), Edvinsson and Malone came up with the idea for the Skandia Navigator in 1997, a tool that evaluates a country’s IC. The application of the Skandia method made a sizeable contribution to the measurement of national knowledge assets. In the second-generation model known as the IC index, all individual indicators are aggregated into a single index. This allows for a comparison between the various variations of intellectual capital and the market variations. One definition of economic development is a rise in a nation’s Gross Domestic Product (GDP), which typically occurs over time. However, another definition of economic development is increasing a country’s revenues, output, and expenditures over time. A country’s intellectual capital and level of competitiveness are intertwined and are the direct result of the country’s level of knowledge. This is because intellectual capital and competitiveness are natural results of a country’s level of expertise. The United Nations Economic Commission for Europe is currently hard at work developing a model that will promote innovation, assess practices already in place, and commercialize knowledge assets.

3. MATERIALS AND METHODS

Market capital, human capital, renewal capital, and process capital are all included in this study’s national framework of IC [12]. The World Competitiveness Reports were used to collect data from 2017 to 2022. This research compared four indices of intellectual capital from four competitive Asian countries, Vietnam, Bangladesh, Iran, and India. The intellectual capital will be measured first and then compared against India, Vietnam, Bangladesh, and Iran. Intellectual capital is separated into four components, according to Skandia navigation. One is market capital, which is defined as an organization’s relationship with its customers, suppliers, and other channels [13]. The second type of capital is human capital, which consists of people’s assets’ knowledge, skills, abilities, capabilities, and experience. Process capital, which includes procedures and technologies, is the third capital [14]. The three capitals of human, process, and market capital were used to assess the current state of an economy. The fourth capital of Skandia is the renewal capital, which is concerned with economic growth through innovation, research, and development.

 

4. RESULTS AND DISCUSSION

The following chart clearly shows the importance of human capital. Iran’s intellectual capital showed negative growth in 2019, but it can be clearly shown if the trend was observed in 2020 that Iran has invested in its human capital to improve its growth. In 2021 and 2022, this growth can also be seen.

Figure 01: National Intellectual Capital of Iran

If we analyze the Bangladesh intellectual capital diagram, we can observe that Bangladesh did not pay any attention to the economic increase in early 2022, 2019 & 2018, but from 2021 onwards, they have been strongly competitive. All variable IC intellectual capital variable has demonstrated a positive trend, which is also prominent.

 

Figure 02: National Intellectual Capital of Bangladesh

Vietnam’s IC graph shows little. Vietnam IC has shown negative growth in all countries. In 2018 and 2019, sustained growth occurred. Growth was then positive and prominent in 2020 and 2021. But in 2022, it suddenly fell. Vietnam’s Total IC decreased from 3.98 to 3.01, respectively.

 

Figure 03: National Intellectual Capital of Vietnam

The figure below shows the trends in intellectual capital variables in India. Indiawas a strongrival.Intellectual capital has continuously increased. Only in 2020 did human capital growth decline slightly, and renewal capital in 2019 was slightly neglected. There was a small decrease as a result of the total IC in 2019, but the Indian economy remained in 2020 again.

 

Figure 04: National Intellectual Capital of India

The average of all three intellectual capital variables in India, Bangladesh, Iran, and Vietnam is shown in the table below. The average intellectual capital of four countries is 5 years. Then there is a rank of indicators and the total of countries’ intellectual capital from 1 to 4. The first is the highest IC, and the second the lowest IC. This table is meant to compare 4 countries’ variables and IC. India is classified as number 1; all variables are classified as 1. Then Vietnam is at 2, with all its variables also at 2 except for the capital of renewal. Then we have number three, Iran, a 3rd place on the human capital and a 2nd place on the capital for renewal. Bangladesh is ultimately classified as number 4. All its variables are classified as number 4, except for market capital.

Table 01:  Comparison of National Intellectual Capital of 4 Countries

5. CONCLUSIONS

According to Skandia, the concept of intellectual capital may be broken down into four distinct components. One of these forms of capital is known as market capital, and it is defined as the relationship that an organisation has with its consumers, suppliers, and other channels. The second sort of capital is known as human capital, and it is comprised of the expertise, experience, skills, and capacities that are associated with people’s assets. The third type of capital is known as process capital, and it consists of both procedures and technology. When analyzing the current state of an economy, it is helpful to consider all three types of capital: market capital, human capital, and process capital. The renewal capital of Skandia is the fourth capital of the nation, and its primary focus is on fostering economic expansion through the promotion of innovation, research, and development. The significance of human capital is graphically shown in the following chart. The growth of Iran’s intellectual capital was negative in 2019, but it will be possible to demonstrate conclusively, if the trend continues in 2020, that Iran has invested in its human capital in order to boost its growth. This rise is also expected to be visible in 2021 and 2022. If we look at the Bangladesh intellectual capital diagram, we can see that the country of Bangladesh paid little to no attention to the expansion of the economy in early 2022, 2019, and 2018 years, but beginning in 2021 and continuing forth, they have been very competitive. Every single variable that constitutes intellectual capital has shown an upward tendency, which is also evident. The IC graph for Vietnam shows very nothing. The Vietnam Investment Corporation has demonstrated a decline in growth across all countries. Growth was maintained during the years 2018 and 2019. After that, in 2020 and 2021, there was robust and solid economic expansion. But there was a precipitous drop in 2022. The Total IC for Vietnam went from 3.98 down to 3.01 in the same time period. The patterns of change in India’s intellectual capital variables are depicted in the image below. India was a formidable adversary. The value of intellectual capital has been steadily growing. Only in 2020 will there be a minor slowdown in the expansion of human capital, and in 2019 renewal capital will be marginally neglected. In spite of the fact that the entire IC in 2019 had a marginally negative impact on the Indian economy, the latter continued to exist in 2020. The following table displays the mean value of all three types of intellectual capital variables for the countries of India, Bangladesh, Iran, and Vietnam. The four countries’ collective intellectual capital has a mean age of five years. Following that is a ranking of indicators and a tally of each country’s intellectual capital, which ranges from one to four. The first one has the greatest IC, while the second one has the smallest. The purpose of this table is to compare the variables and IC of four different countries. India is considered to be number one, and all other factors are also considered to be number one. Then Vietnam is at position 2, with all of its variables also located at position 2, with the exception of its capital of renewal. Iran comes in at number three, holding the third spot on the list of countries with the most human capital and the second spot on the list of countries with the highest capital for renewal. Bangladesh is finally ranked as the fourth most populous nation. With the exception of market capital, all of its characteristics fall into the category of number 4.

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