1. Quaid-i-Azam University, Islamabad, Pakistan; mrs.iftekhar12019@gmail.com

*             Correspondence: mrs.iftekhar12019@gmail.com

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

1. INTRODUCTION

One definition of economic development is represented by an increase in the Gross Domestic Product (GDP) of a nation. However, another definition of economic development is the increase in a country’s revenue, output, and expenditures over time. The growth of the economy has led to an increase in the number of transactions that take place, which in turn has led to an improvement in the standard of living enjoyed by the population as a whole. People’s concerns regarding their economic future gradually increased in the decades following the end of World War II [1]. After the end of the European era, a number of countries that had previously been colonies and had low incomes were designated as underdeveloped countries in order to differentiate them from industrialised countries [2]. A nation is considered to be “developing” when its standard of living begins to rise after having been stagnant for a significant amount of time and the nation was previously classified as “underdeveloped.” The definition of development is an increase in per capita income, while the classification of countries that are not considered to be developed is done according to their per capita income. The nation’s overall economic health and prosperity can be most accurately determined by looking at the average income of the population in that country. (The Changing Economic Landscape | Britannica) [3] (The Changing Economic Landscape | Britannica). The quality of life of residents should be the primary focus of policymakers as their primary responsibility. To phrase it another way, intangible assets are significant contributors to economic expansion, personal happiness, and the accumulation of wealth. Both a country’s intellectual capital and its competitiveness are intertwined and are the consequence of the country’s knowledge [4]. Indicates that there is a positive relationship between intellectual capital and financial performance, despite the fact that many other results have been obtained. Intellectual capital is an essential component in the growth of businesses [5], the introduction of new products and services, and the maintenance of a 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” refers to a way of coping with the stress that people experience as a result of trying to juggle the various aspects of their lives. One definition of economic development is a rise in the Gross Domestic Product (GDP) of a nation, and this rise typically occurs over time. However, another definition of economic development describes it as an increase in a country’s revenue, output, and expenditures. As a result of the expansion of the economy, more people are purchasing goods and services, which contributes to an increase in the standard of living across the board. Following the conclusion of World War II, people gradually started becoming anxious about what their economic future held for them. After the end of the European era, several countries that had previously been colonies and had low incomes were differentiated from industrialised countries by referring to them as “underdeveloped countries.” It is said that a country is considered to be developing when the standard of living in that country begins to rise after having been lower than average for some time. Countries that do not meet the criteria for being developed are categorised according to their per capita income, whereas 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, Bangladesh and India. The intellectual capital will be measured first and then compared against India and Bangladesh. 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

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 01: National Intellectual Capital of Bangladesh

The figure below shows the trends in intellectual capital variables in India. India was a strong rival. 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 02: National Intellectual Capital of India

The average of all three intellectual capital variables in India and Bangladesh 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 2 countries’ variables and IC. India is classified as number 1; all variables are classified as 1. Bangladesh is ultimately classified as number 2.

5. CONCLUSIONS

According to Skandia’s research, the idea of intellectual capital can be separated into four individual 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. Other forms of capital include intellectual capital and social capital. The second type of capital is known as human capital, and it is comprised of the knowledge, experience, skills, and capabilities that are associated with people’s assets. This type of capital is known to be more valuable than financial capital. The third type of capital is known as process capital, and it is made up of both technology and procedures. It is also known as intellectual capital. When conducting an assessment of the current condition of an economy, it is beneficial to take all three forms of capital into consideration: market capital, human capital, and process capital. Skandia’s fourth and current capital, the renewal capital of Skandia, places a primary emphasis on fostering economic expansion through the promotion of innovation, research, and development. This city is the fourth and current capital of the nation. The following chart provides a graphical representation of the significance of human capital. If we take a 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 the early 2022, 2019, and 2018 years, but starting in 2021 and continuing forward, they have been very competitive. This is something that we can see because the country of Bangladesh paid little to no attention to the expansion of the economy in the early 2022, 2019, and 2018 years. Every single factor that is included in the definition of intellectual capital has exhibited a trend in the upward direction, which is also obvious. The image that follows depicts the patterns of change in the different variables that make up India’s intellectual capital. A formidable adversary was presented by India. The value of an organization’s intellectual capital has been on an upward trend for quite some time. Only in 2020 will there be a slight slowdown in the expansion of human capital, and in 2019 renewal capital will be marginally neglected. This will not happen with regard to the expansion of physical capital. Even though the entire IC had a marginally negative impact on the Indian economy in 2019, the latter continued to exist in 2020. This is despite the fact that in 2019, the impact of the IC as a whole was only marginally negative. The countries of India and Bangladesh are compared using the following table, which shows the mean value of all three categories of intellectual capital variables. The collective intellectual capital of the two countries has an age distribution with a mean of five years. After that is a ranking of indicators and a tally of each country’s intellectual capital, with the first country having the highest IC and the second country having the lowest. This table’s objective is to make a comparison between the variables and IC of the four different countries listed. India is regarded as the most important factor, and all other considerations are also regarded as being the most important. After a long climb up the ranks, Bangladesh is now the fourth most populous nation. All of its characteristics, with the exception of market capital, can be placed in the category designated as number 2.

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