The effect of IC on different aspects of innovation performance in Serbian companies

Purpose - In the changing business environment, organizational capability to create innovation can be considered as a prerequisite to sustain its growth. Therefore, it becomes important for both academics and practitioners to examine all drivers (tangible and intangible) of innovation process. In researching the linkages between intellectual capital (IC) and innovation, it is widely accepted that IC is associated with organization's innovative performance. Nevertheless, traditional assessment of innovation performance does not usually tackle IC and knowledge issues. For that reason, this paper presents an empirical analysis of the effect of different IC categories on various types of innovation performance. The main objectives are to understand the role of IC in different aspects of companies' innovation performance better and enable companies to capture as much of innovation potential as possible in order to capitalize IC for innovation. Design/methodology/approach - This research is based on survey data, collected in Serbia during 2014. The survey included 78 Serbian companies with at least 100 employees. The companies were diverse with regard to ownership structure, industry and geographic location. Seven IC categories were analysed (human, structural, internal relational, external relational, renewal, entrepreneurial, trust) in terms of their effect on five different types of innovation performance (innovation in products/services, processes, management practices, marketing practices, business models). Correlation and linear regression analyses were used to identify correlations between aforementioned measures and significant influence of IC stocks on different types of innovation performance. Originality/value - It is well-accepted in the relevant literature that IC encompasses three interrelated categories: human capital, structural capital, and relational capital. However, to explain the linkages between IC and innovation better, the following new IC dimensions were added: renewal capital, entrepreneurial capital and trust capital, which could be especially influential for innovation. This study is original also in examining the linkages between IC categories and different innovation performances to identify the most significant IC elements for various aspects of innovation. Practical implications - The outcomes reveal potential and barriers within IC, crucial to different aspects of innovation performance. In this way, this study enables deeper understanding of intangible drivers of various types of innovation and highlights possibilities to foster intangible innovation potential. Finally, our findings help the managers to capture more innovation potential, facilitate and capitalize IC in process of innovation and improve different types of innovation in Serbian companies.