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The purpose of this paper is to examine to what extent national intangible capital (NIC) explains GDP growth and to assess its impact on GDP formation in different countries. The paper brings a new perspective to explaining hidden economic drivers.

The paper introduces a new theoretically and computationally justified method, so-called ELSS model that is based on expansion and augmentation of the Cobb-Douglas production function with a wide range of NIC indicators. The method is applied by using the database that contains NIC indices for 48 countries covering the period from 2001 to 2011.

The results show that intangible capital accounts for 45 per cent of world GDP. The figure for the USA is 70.3 per cent and for the European Union 51.6 per cent. The Nordic countries stand out with a higher figure at 64.7 per cent, with NIC contributing to 72.5 per cent of GDP in Sweden, 69.7 per cent in Finland and 67.6 per cent in Denmark.

The expanded Cobb-Douglas production function is sensitive to valuations of capital inputs and sensitive to estimates of production shares for various augmenting and expanding inputs. Therefore further work is needed to develop and test methodologies for the assessment of all of these.

ELSS production function helps to give a realistic picture of the value and impact of NIC and accordingly gives evidence for accurate investment decisions for the future.

The method will help policy makers figure out what steps are needed to reduce the cross-country NIC differences.

The authors have uncovered the value of NIC beyond monetary inputs, and at the same time taken account of country specifics. The ELSS formula is comprehensive yet not too complicated to replicate. The approach significantly contributes to the development of the current research tradition into intangibles.

The paper aims to provide an assessment of a tool for the macro‐level measurement of intellectual capital developed by Corrado, Hulten and Sichel (CHS model).

The aim paper assesses the validity and accuracy of the CHS model in measuring intellectual capital in general and to see whether it has application at the national economy level.

The model's new accounting ideas have great potential, but some serious question marks remain. The key advantage of the model is that it accumulates capitalized intangibles over time. On the other hand, the elements of intellectual capital, i.e. spending on innovative property and economic competencies, software and other computerized information, are too vague and problematic.

CHS model is a rather frequently used method for measuring intellectual capital. However, its validity has not been under critical analysis or examination earlier. Therefore, the results of this paper bring important and valuable information into reliable measurement of intellectual capital and are a step forward to develop more valid methodologies within intellectual capital research.

The purpose of this paper is to provide a quantitative measure for organizational renewal capability which would enable inter‐firm comparison and external communication. To make the tool more concrete for the reader, a case organization with the measurement results and conclusions is described.

A method of how renewal capability can be shown on an organizational level and measurement is demonstrated. The approach is based on systems thinking, but it also has boundary surfaces with the knowledge‐based theory of the firm, dynamic capability approach, and intellectual capital (IC) research. A tool for analyzing and measuring organizational renewal, called KM‐factor^®, and the theoretical model behind it, is presented.

The preliminary analysis indicates that the indexes of KM‐factor^® correlate strongly with the future financial success of the company. Thus, the results refer to the fact that companies with (system based and strategy connected) renewal capability have more competitive advantage than others. It is crucial for the organization to understand the required change direction in renewal capability to achieve sustainable competitive advantage.

The topic of renewal has been increasingly dealt with by the research traditions of IC, knowledge management and strategic management. However, even if several relatively consolidated theories about the composition of IC or competitiveness have been presented – renewal being one of the components – the operational and measurement perspectives of continuous renewal have mainly been neglected. This paper demonstrates a quantitative and practical implementation of organizational renewal capability measurement.

The paper aims at creating understanding on the dynamics of intellectual capital (IC), which has emerged recently as one of the major issues on the research agenda. The theme is studied from a national point of view.

The analysis has been conducted using data from the IMD Competitiveness Report covering the data of 51 countries from the years 2000‐2005. Data analysis is aimed at analysing time dependent relationships between intellectual capital and GNP growth. The research provides parameters of four types of effects for a nation's GNP growth: sustaining effects, boosting effects, linear growth potential and exponential growth potential. Based on the developmental stage of the countries they were grouped to: developing; transitional; and developed countries, and the effects of IC was studied within and between these groups.

The analysis specifies the types of IC factors that have important effects on economic growth on different level of economics. The analysis also provides an analytical framework for designing the context in which IC of nations can be adequately considered in the mid‐long term perspective.

The research has to be considered as exploratory. It has been conducted using only one database with certain limitations. Further research is needed especially by integrating other components of intellectual capital, e.g. reputation, decision‐making processes, and cultural dimension.

From a practical perspective the findings also provide important guidelines and framework for policy makers.

This paper provides a new view on the dynamics of IC at national level by relating IC ingredients to economic performance and specifying under which circumstances IC has important effects on national GNP growth.

This paper seeks to examine the calculated intangible value (CIV) method as a measure of intellectual capital (intangibles) in enterprises. The aim is to show the benefits and disadvantages of the method and its actual relation to intellectual capital.

The authors present a conceptual, theoretical and empirical analysis of CIV to assess its validity as a measure of firm's intangibles.

The result of the analyses is that CIV is connected to all types of capital assets (physical, financial, combined physical and financial and intangible) and thus it does not unambiguously relate or measure firm's intangible value(s). CIV should be seen solely as a measure of financial efficiency derived from companies' return on assets (ROA). CIV measures an overall financial recognized comparative advantage in comparison with competitors within the same branch of industry. There is no evidence to support the simplistic assumption that a company's CIV is a measure of its intellectual capital.

CIV is used quite widely for purposes of measuring intellectual capital in companies and industries. However, its validity has never been subjected to critical examination. The results of this paper provide valuable information on the reliable measurement of intellectual capital and the further development of these measurements.

This paper introduces a newly developed knowledge management concept, dynamic intellectual capital (IC), which refers to a company’s ability for self‐renewal. The paper presents how dynamic IC is created in three different knowledge environments – mechanistic, organic and dynamic – and brings out relevant empirical evidence from three case studies of multinational and Chinese firms. The paper concludes that knowledge‐intensive organizations need to master all the three knowledge environments regardless of their different strategic focus. Failures on any environment might form a hindrance for market efficiency. The development of dynamic IC is subject to the firm’s ability to balance both current arena (e.g. realized IC) and potential force (e.g. potential IC). The development of dynamic IC is strongly based on multi‐way communication, which must include both top‐down and bottom‐up as well as cross functional communication. The analysis of tensions, problems and challenges can be a critical step toward a self‐renewing organization in managing such complexity of dynamic IC.

The purpose of this paper is to provide a review of the innovation literature, with special focus on studies applying a complexity perspective. As a contribution in its own right to the innovation literature, the review clarifies the concept of complexity, explores possible points of relevance and the “added value” gained from complexity theory (CT) to the study of innovation, and identifies some of the applications of the theory.

A literature search was conducted which yielded 20 relevant articles. These articles were analyzed by focusing on the key concepts of complexity and studying their applications in the context of innovation research.

Based on the approach adopted, the literature was divided into three categories, namely research focusing on microdynamics, macrodynamics, and leadership and management. The key complexity concepts identified in the innovation literature were “edge of chaos”, “phase shift”, “emergence and self-organization”, “(co)evolution”, and “complexity regulation”. The articles reviewed differed in terms of their perspectives on complexity and, accordingly, their operationalization of the complexity concepts. Key areas of development suggested by the authors include forging a stronger link with existing innovation theory and giving greater weight to empirical evidence.

While a systematic review strategy was adopted to identify all relevant research on “open innovation” and complexity, a selective snowball strategy was deemed the only feasible approach to cover research conducted on “innovation” and complexity.

Practitioners can learn to put CT-based research in context and also learn to recognize the value of CT for innovation management. The authors distilled three important lessons for practice from the research done: embracing complexity, embracing ambidexterity, and embracing failure.

To the best of the authors’ knowledge no review has as yet been undertaken to encapsulate the current state of applications of CT to innovation research.

The purpose of this study is to analyse the validity of the value added intellectual coefficient (VAIC) method as an indicator of intellectual capital.

The paper describes VAIC through its calculation formulae and aims to establish what exactly it is that the method measures. It also looks in detail at how intellectual capital is understood in the method, and discusses its conceptual confusions. Furthermore, the paper tests the hypothesis according to which VAIC correlates with a company's stock market value, and reflects the contradictory results of earlier studies.

The analyses show, first, that VAIC indicates the efficiency of the company's labour and capital investments, and has nothing to do with intellectual capital. Furthermore, the calculation method uses overlapping variables and has other serious validity problems. Second, the results do not lend support to the hypothesis that VAIC correlates with a company's stock market value. The main reasons behind the lack of consistency in earlier VAIC results lie in the confusion of capitalized and cash flow entities in the calculation of structural capital and in the misuse of intellectual capital concepts.

The analyses show that VAIC is an invalid measure of intellectual capital.

The result is important since the method has been widely used in micro and macro level analyses, but this is the first time it has been put to rigorous scientific analysis.

The purpose of this paper is to investigate how physical spaces intersect with innovation and innovativeness, and what the most relevant attributes of physical space are for innovation.

The paper reflects the changing nature of innovation, from technological advancements to services and meaning changes, and argues that the development of innovative spaces similarly embodies a diverse set of values such as collaboration, openness, and sustainability. Using a literature review, interviews, and benchmarking data, the paper examines the relationship between physical environment and innovation.

The findings from both the literature review and the interviews underline innovation as a communicative and human-centred process. As a result five attributes of innovative space are presented: collaboration enabling, modifiability, smartness, attractiveness, and value reflecting.

The results provide perspectives to the challenge of how to support innovation creation by developing physical spaces. The paper adds to the conceptual development of innovative space and outlines physical space as an innovative service.

To introduce the 2007 annual special issue on knowledge‐based development (KBD), from the perspective of the institutionalization of KBD as a field of study and practice, followed by an outline of the contents.

The approach is a discussion of the issues involved.

The consolidation of KBD and knowledge cities as a distinctive field of R&D, as well as professional practice, becomes apparent when considering structural elements such as affluents, issues, cases, sources, events, organizations and initiatives. This consolidation seems to underlie the progression of contributions through this special issue and prior ones on the same subject.

This special issue may contribute to raise new questions and stimulate further research into knowledge cities, regions and countries.