Intellectual Capital and the Micro and Small Business Performance: A Narrative Literature Review

Intellectual capital is an intangible asset that potentially affects the performance of micro and small enterprises (MSEs). This paper aims to deliberate a narrative type of literature review to understand the concept of intellectual capital and its relationship with business performance. Through the narrative literature, a comprehensive, critical and objective analysis about the current existing knowledge on intellectual capital and business performance is identified and assists in the development of an inclusive theoretical conceptual framework in line with the current research. The findings show that intellectual capital consisting of 3 dimensions of human capital, relationship capital and structural capital, is an important variable in the study of business performance management. The basis for the creation of competitive advantage and its value-added is based on the theory of Resource-based View (RBV). In addition, the integration of the Integrated Intellectual Capital Model (IICM) perspective provides a more comprehensive dimensions in the intellectual capital (IC) construct from 3 to 6 dimensions. Finally, a future research focus on IC and business performance is presented where IC is modeled as one of the variables of the strategic asset category that influences MSE performance. Intellectual capital can be optimized as a tool for creating value that contributes to a firm's performance, while entrepreneurial leadership becomes the driving force that determines how well the firm's tools can be optimally organized to produce good business performance. Thus, intellectual capital and entrepreneurial leadership are factors that become the interest of current researchers when addressing the performance and strategic management issues of the MSE entities.