© josé m. viedma marti, 2003. i c the 6th world congress on intellectual capital and innovation....

© José M. Viedma Marti, 2003.

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The 6th World Congress on The 6th World Congress on

Intellectual Capital and Innovation.Intellectual Capital and Innovation.January 15-17, 2003January 15-17, 2003

Josep Ma. ViedmaProfessor of Business Administration at the Polytechnic University of Catalonia

and President of Intellectual Capital Management Systems

CICBS: Cities’ Intellectual Capital Benchmarking CICBS: Cities’ Intellectual Capital Benchmarking SystemSystemA methodology and a framework for measuring

and managing intellectual capital of cities.

A practical aplication in the city of Mataró.

http://intellectualcapitalmanagementsystems.com


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The ContextThe Context

In the past, the vision, objectives, and goals of cities have been determined mainly by considering tangible assets as the main factors of a city’s prosperity.

In the knowledge economy, the role of intangible assets in wealth creation has become fundamental

As a result a framework of intangible assets that allows navigation from the present reality to the future vision has become an urgent need for all cities.


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Two parts of the paper

1st. Part. -Development of CICBS a specific methodology and a framework for measuring and managing the intellectual capital of cities.

2nd.Part. -Practical application of CICBS in the city of Mataró.

-Providing some details of the first cities’ intellectual capital report


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1st. Part

The government of cities in the information society

Important questions for city governments:

Which facilities must be offered by city governments if the city is to be the most attractive place in which to live?

How can innovative companies be attracted to the city?

How to foster entrepreneurship?

Which organisational structures are required?

How the city be transformed to face new technological changes successfully?


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1st. Part

The government of cities in the information society

The new success formula will combine:

New technologies (microprocessor-based products).

Transportation (the Internet and broadband telecommunications).

Labour (the mix of office-goers, telecommuters, ‘road warriors’, and ‘corporate gypsies’).

Infrastructure (virtual organisations)


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1st. Part

Measurement and management of cities’ intellectual capital: The state of the art.

Microeconomic perspective.

Macroeconomic perspective.

Skandia Navigator (Edvinson)

Balanced Scorecard (Kaplan)

Dublin a world class e-city (Chamber of Commerce)

National Intellectual Capital Index: Intellectual capital Development in he Arab Region (Bontis)

Invest in Sweden: Report 2002 (Rembe)

The intellectual capital of the State of Israel (Pasher).


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Cities’ specific Intellectual Capital Model

Microcluster Nº1 Microcluster Nº2 Microcluster Nº3 Microcluster Nº X

Cities’ general Intellectual Capital Model

Segmentdemand

Output

Products and services

Processes

Core competencies

Professional core competencies

Vision

Segmentdemand

Output


Processes

Core competencies


Vision

Segmentdemand

Output


Processes

Core competencies


Vision

Segmentdemand

Output


Processes

Core competencies


Vision

Segmentdemand

Output


Processes

Core competencies


Vision

Segmentdemand

Output


Processes

Core competencies


Vision

Segmentdemand

Output


Processes

Core competencies


Vision

Segmentdemand

Output


Processes

Core competencies


Vision

Core competencies

Vision

Process Capital

Renewal & Development Capital

Financial Capital

Market CapitalHuman Capital

Past

Present

Future

Core activities

Indicators

IC Categories

1

5

2

3

4

Core competencies

Vision

Process Capital


Financial Capital


Past

Present

Future

Core activities

Indicators

IC Categories

11

55

22

33

44

1st. Part

CICBS City’s Intellectual Capital Benchmarking System


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Core competencies

Vision

Process Capital


Financial Capital


Past

Present

Future

Core activities

Indicators

IC Categories

1

5

2

3

4

Core competencies

Vision

Process Capital


Financial Capital


Past

Present

Future

Core activities

Indicators

IC Categories

11

55

22

33

44

Benchmarking

Core competencies

Vision

Process Capital


Financial Capital


Past

Present

Future

Core activities

Indicators

IC Categories

11

55

22

33

44

Mataró Treviso

1. Creating the vision.

2. Identifying the core activities needed to realize the vision .

3. Identifying the core competencies needed to realize the core activities .

4. Identifying the indicators for each core activity and each core competence.

5. Assembling the indicators into different intellectual capital categories .

1st. Part

Cities’ general Intellectual Capital Model (CGICM)Common and general knowledge - an intellectual capital platform - that strengthens the

existing microclusters of a city and nurtures the building of new ones.


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1st. PartCGICM. Intellectual Capital Categories

HUMAN CAPITAL.

Tacit knowledge (knowledge, wisdom, expertise, intuition and the like) of individuals to realize city task and goals.

PROCESS CAPITAL.

Structural intellectual assets (information systems, software, databases, laboratories, organisational structure, management systems) which sustain and amplify the output of human capital.

MARKET CAPITAL.

Market assets (customer-city loyalty, strategic customers satisfaction, value of brands and so on) embedded in a city’s relationship with the national and international market.

RENEWAL AND DEVELOPMENT CAPITAL.

Renewal and development assets (investment in research and development, patents, trademarks, start-up companies and the like) aimed to the exploitation of cities competitive strength in future markets


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1st. PartCities’ specific Intellectual Capital Model

(CSICM)

Segment

demand

Output


Processes

Core competencies


Vision

Segment

demand

Output


Processes

Core competencies


Vision

Microcluster Nº1Homologous Microcluster Nº1

Best World reference cityCity A City B

Benchmarking

Benchmarking

Benchmarking

Benchmarking

Benchmarking

Benchmarking

Benchmarking

Draws inspiration from ICBS (Viedma)


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1st. PartCities’ specific Intellectual Capital Model

(CSICM)

Vision

History (Narrative description)

Present situation (Narrative description)

Microcluster Nº 1

Factors Content of the factors

Indicators andsources of

information

-Classification of the different types of demand

-Segment demand evaluation

-For each type of demand, functions and attributes of products and services

-Value chain activities and competencies for each type of demand.

-Core competencies for each value chain within each type of demand.

-Core professional competencies for each valuechain within each type of demand.

- The microcluster we would like to have in the future

Professional corecompetencies

Segmentdemand

Output

Products andservices

Processes

Corecompetencies

Soft data

Hard data

Soft data

Soft data

Soft and

Soft and

Soft data

hard data

hard data

Customer

need

Identified

Customer

need

Satisfied

Innovation Operations

Core activitiesCore competencies


ServiceMarketMakeDevelopDesign

Customer

need

Identified

Customer

need

Satisfied





Customer

need

Identified

Customer

need

Satisfied





Customer

need

Identified

Customer

need

Satisfied






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2nd. Part

Practical application in the city of Mataró.

ICMM project (Intellectual Capital Management of the city of Mataró).

ICMM project objectives:

1) To finalize and coordinate the different initiatives of Mataró in orientating the city towards the information and the knowledge society.

2)To have a strategic planning navigation framework in the intangibles domain.


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2nd. Part

The City of Mataró. Located in the north-east of Spain. 104.880 inhabitants and 22,6 square kilometres. 28 kilometres north of Barcelona. Part of the metropolitan region of Barcelona. Capital of the Maresme region (300.000 inhabitants, 397 square kilometres). Area of high economic and tourist development.


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2nd. Part

Antecedents of the ICMM project.

Macro projects

Institutions

Master plan for the Information Society in Mataró 1999.

Mataró, knowledge city, January 2002.

New Institutions created and Institutions strengthened.

Tecnocampus Mataró.IMPEM

PUMSA

EUPM

CETEMMSA


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2nd. Part

Mataró General Intellectual Capital Model.

Covers the intellectual capital platform, which is common to all the relevant economic activities of Mataró city.

Information and data for the initiation of the I.C. platform provided by:

-the two macroprojects

-the observatory of Mataro’s information society.

-the Municipal Institute for Economic Promotion.

No benchmarking of IC indicators in the first step.

Benchmarking has to be done in the future with the most advanced cities in terms of information and telecommunications technologies and knowledge management.


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SV DV3 16

SV DV3 16

SV DV2 8

SV DV3 6

SV DV3 6

SV DV3 4

SV DV3 4

SV DV5 24

Past

Present

Future

IC

2nd. Part

Mataró General Intellectual Capital Model.

IC Categories / Number of Indicators

SV= Summary Version Total SV= 16DV= Detail Versión Total DV=58


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2nd. Part

Mataró General Intellectual Capital Balance Sheet.

Mataró General Intellectual Capital Balance sheet

PERIOD VALUE MEASURE UNIT

FINANCIAL CAPITALGDP (market prices) 1991 817,81 1996 1064,06 Millions of eurosHousehold's disposable income 1991 6.022,7 1996 8.550,6 euros per capitaGDP per capita 1991 8058 1996 10430 euros

HUMAN CAPITAL

University/College + secondary studies 1991 17,14% 1996 22,1% PercentageHabitual internet users october-1998 11% september 2001 27,9% PercentagePercentage of qualified workers 1991 26,50% PercentageActivity rate 1991 56,98% 1996 55,67% PercentageGini Index 1989 0,387 1994 0,368 Index

PROCESS CAPITAL

Service sector development PercentageSalaried workers in the high knowledge sector (%) 1st quater 2002 37,7% PercentagePercentage of firms with internet connection october-1998 24,1% september 2001 66,7% Percentage

MARKET CAPITAL

Self-containment 1991 79,53% 1996 72,28% PercentageSelf-sufficiency 1991 81,91% 1996 75,93% PercentageExports/imports ratio 2000 0,68 Ratio

RENOVATION CAPITAL

Youth rate 1996 16,99% 1 january 2002 14,21% PercentageNew firms registered for taxation 1997 1r quater 2002 3.382 Firms

PREVIOUS VALUE

PREVIOUS PERIOD DIVISIONS

CICBS

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2nd. Part

Mataró General Intellectual Capital Balance Sheet.

Mataró General Intellectual Capital Balance sheet. Human Capital detail

HUMAN CAPITAL

University/College + secondary studies 1991 17,14% 1996 22,1% PercentageContinous education (adult participation rate)Illiteracy rate 1991 6,34% 1996 4,73% PercentageHabitual computer users october-1998 nd september 2001 43,7% PercentageHabitual internet users october-1998 11% september 2001 27,9% PercentageLife expectancy 1999-1995 79,65 2001-1997 80,12 YearsPercentage of qualified workers 1991 26,50% PercentageActivity rate 1991 56,98% 1996 55,67% PercentageActivity rate. Men 1991 71,71% 1996 68,87% PercentageActivity rate. Women 1991 43,11% 1996 43,14% PercentageActivity rate. Young. 15-24 1991 61,17% 1996 53,82% PercentageActivity rate. Adults. 25-54 1991 1996 PercentageActivity rate. Adults. 55-64 1991 1996 PercentageLibrary visits 2000 280.040 PeopleCultural entities and organizations 1999 189 2000 203 Number of entitiesCinema capacity /1000 inInhabitants 1999 36,82 2001 32,91 Seats / 1.000 inhab.Theatre capacity/1000 inInhabitants 1999 7,78 2001 7,52 Seats / 1.000 inhab.Cultural entities/ 1000 Inhabitants 1999 1,80 2000 1,92 Entities / 1.000 inhab.Abstencions rate over the total electoral roll 1996 21,16% marzo 2000 33,7% PercentageGini Index 1989 0,387 1994 0,368 IndexPeople receiving poverty subsidy 1999 296 2002 236 PeopleRegistered unemployment rate PercentageFemale unemployment rate Percentage

PREVIOUS PERIOD PERIODDIVISIONS VALUE MEASURE UNIT

PREVIOUS VALUE

CICBS


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2nd. Part

Mataró Specific Intellectual Capital Model.

Identification of the relevant microclusters.

The microclusters identified were the following:

-Textile (knitwear) (23% of the working population)

- Construction.

- Retail trade.

- Education and training.

Evaluation of the CSIC model factors and criteria through ad hoc questionnaires to experts and companies.

In the best world city microcluster, evaluation of the homologous factors and criteria using the same questionnaires.

Comparison of the corresponding results (Benchmarking).

Reliability indexes or accuracy level indexes.


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2nd. Part

Mataró Specific Intellectual Capital Balance Sheet.

Factors Mataró Treviso

Employees per firm 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

1 a 5 2 15 a 10 2 1

10 a 25 3 325 a 50 2 450 a 100 1 1100 o > 1 1

Accuracy level 82% 50%Demand type 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

Final consumer 1 2Distributors 2 4

Departamental Stores 2 1Other textile producers 2 1

Own stores 1 2Multibrand stores 3 2Accuracy level 80% 50%

Products and services 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10Quality 7 8Price 6 9

Fashion 6 9Accuracy level 70% 50%

Mataró Treviso


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2nd. Part



Innovation 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10In the product 7 9In the process 6 8

Accuracy level 80% 50%Processes 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10Spinning 2 0Finishing 1 0Design 5 8

Wearing 5 2Marketing and distribution 4 8

Accuracy level 80% 50%Product type 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

Men's underwear 1 0Women's underwear 1 0

Men´s outwear 2 8Women´s outwear 3 9

Children 2 2Sport 1 1

Accuracy level 76% 50%

Mataró Treviso


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2nd. Part



Distribution channels 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10Own stores 1 2Franchises 1 2Salesmen 2 8

Representatives 6 9Accuracy level 76% 50%

Core competencies 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10Own brand development 5 8

Outsourcing degree 5 7Local outsourcing degree 8 4Labour force qualification 5 7

Export potential 4 7IT use 5 7

Technological development 4 6Institutional frame 7 8Accuracy level 81% 50%

Total accuracy level 78% 50%

Mataró Treviso


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In the past, the vision, objectives and goals of cities have been determined mainly by considering tangible assets as the main factors of a city’s prosperity.

In the knowledge economy the role of intangible assets in wealth creation has become fundamental.

As a result some local communities have initiated strategic plans to develop new information technology and collective knowledge.

However these plans all lack coordination and continuity.

More significantly, they lack an intangible assets framework that allows navigation from the present situation to the future vision of the city.

Conclusions


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To fill this gap the present paper has presented a model and a framework especially developed for measuring and managing the intellectual capital of cities (CICBS)

City’s Intellectual Capital Model has two different approaches. The first one covers all economic activities of the city. The second one deals specifically with each relevant economic microcluster. Both approaches use benchmarking techniques.

The paper also deals with the practical application of CICBS to the city of Mataró.

In presenting this pioneering effort it is hoped that new productive research on managing intangibles in municipalities will be encouraged.

Conclusions

Thanks for listening

© josé m. viedma marti, 2003. i c the 6th world congress on intellectual capital and innovation....

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