570 Intellectual Capital in education – a value chain perspective Manfred Bornemann* Intangible Assets Consulting GmbH Dr. Anton Schlossar Weg 16 A-8010 Graz, Austria Roswitha Wiedenhofer FH JOANNEUM University of Applied Sciences Alte Poststrasse 149, A-8020 Graz, Austria * Corresponding author Structured Abstract 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.
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570
Intellectual Capital in education – a value chain perspective
Manfred Bornemann*
Intangible Assets Consulting GmbH Dr. Anton Schlossar Weg 16 A-8010 Graz, Austria
Roswitha Wiedenhofer
FH JOANNEUM University of Applied Sciences Alte Poststrasse 149, A-8020 Graz, Austria * Corresponding author
Structured Abstract
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.
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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.
Keywords –intellectual capital, education, value chain, Wissensbilanz made in Germany
Paper type – Academic Research Paper
We would like to express our gratitude to the authors of the case studies, all of them participants of the master class for knowledge management at the Applied University of Eisenstadt. We would like to express our gratitude to the participants of two projects in the business of continuing education, who need to remain unidentified for reasons of confidentiality. We would like to express our appreciation for the feedback from S. Eschenbach (fh Burgenland), R. Reinhardt (fh Riedlingen) and K. Alwert (AKWB):
1 Introduction and Observations
According to high level international sources (OECD, 1998; OECD, 2000; OECD,
2012; EC, 2012), education systems are crucial for the productivity and future prosperity
of societies. Large budgets are allocated by national governments as well as private
institutions and participants in education processes. All of them rightfully expect a
reasonable return from their investments, but regularly, respected sources report troubles,
albeit on different levels. The Human Development Report (UNDP/DGVN, 2013) is a
source that relates the level of education to human development and documents relevant
challenges for significant parts of the world. This supports the ambitions to optimally
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Figure 1: Population per nation as function of education and human development index, i.e. a composite index measuring average achievement in three basic dimensions - a long
and healthy life, knowledge and a decent standard of living (UNDP/DGVN, 2013).
Independent from the relative level, national policies try to align their education
systems to the (local) labour market and particularly to demands by leading industries and
service providers. Governments (from developed as well as emerging economies)
regularly publish strategy papers and plans how they intend to accomplish these targets,
but only very few provide insights how they would like to proceed. Even so, elaborated
national educational strategy and implementation plans most often cover only a special
segment within the educational system (e.g. tertiary education) and beyond that strongly
focus on structural and resource related issues within the chosen segment.
1.1 Value chains as an approach to improve results
In complex industrial production systems with partially global sourcing strategies,
concepts such as supply chains were implemented decades ago and improved ever since.
The general benefits of supply chain management approaches support (among others)
improvement of operations, increase of profits and an enhanced quality of outcome. Later
on, these concepts were also applied to service industries and in a few cases to
educational contexts. First suggestions of educational supply chains in tertiary education
were provided by O´Brien and Dean (1996). Lau (2007) introduced a supply chain
management approach to suggest innovative management ideas in higher education with
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industry and SMEs in various configurations. The initial learning curve is successfully
completed; a transfer to education is not only possible but entirely feasible as
demonstrated with this paper.
However, there are several challenges to be overcome:
· Definition of individual sets of drivers of Intellectual Capital which are relevant
for each individual institution while simultaneously allowing for consolidation
into a larger framework.
· Definition of connecting drivers of Intellectual Capital that establish not only
relations but support procedural exchange in order to optimize parts and later the
whole value chain.
· Definition of an appropriate scale with inter-subjective and auditable measures
that support comparability and benchmarking. This, however, is clearly of
secondary priority.
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