Intellectual Capital in education - a value chain perspective

Purpose - Educational institutions are highly regulated and regularly in the focus of political as well as professional reflection for improvement. This paper aims to apply the concept of Intellectual Capital (Edvinsson, 1997, Guthrie 2000) to assess intangible resources as crucial for the quality of educational processes as well as to identify patterns of interdependence between drivers of Intellectual Capital and generic processes of educational institutions (Bornemann, 2007) as a prototype study in Austria. Starting with elementary schools, secondary as well as tertiary levels of education are analyzed and related to each other in order to identify the need to differentiate drivers of Intellectual Capital for each type of school or to apply standardized drivers independent from the operational focus (Alwert et al, 2010). Design/methodology/approach - Educational institutions are typically regulated by governmental procedures and hence do not follow entrepreneurial management models. This paper suggests the assumption of a value chain of schools with the pupil or learner as the customer as well as the object of intervention. With this analogy, experiences from the application of Intellectual Capital assessment in value chains of the automotive industry are transferred and applied to education. The methodology of "Wissensbilanz - made in Germany" (BMWI, 2004) is applied in action research oriented prototypes along this value chain (Bornemann et al 2011). Results are consolidated according to procedures for stock noted companies (Alwert 2009). Originality/value - Austria officially implemented the legal obligation for Intellectual Capital reporting for universities in 2007. The implementation of these procedures was discussed controversially in some articles, and certainly did not come to an end. Up to date, no test on the usefulness of Intellectual Capital assessment in other educational institutions such as elementary schools, secondary schools or professional schools was reported. Based on data from 12 case studies collected over a time frame of 2011 and 2012, this paper will report preliminary insight and call for further research along the value chain of education. Practical implications - Applying methodologies for Intellectual Capital reporting in educational institutions and integrating the management of these resources along the value chain of education seems to be very beneficial not only for ministries of education as the major common stakeholder but for de-central decision makers as well. Prioritizing scarce resources and systematically observing intangible assets in public as well as privately management educational intuitions contributes to economic improvement and better accomplishment of strategic objectives.