EU member states’ ability to attract intellectual capital in times of crisis

Abstract

Purpose – The purpose of this study is to assess how the recent financial and economic crisis has affected European Union (EU) member states’ ability to attract intellectual capital. The issue was found to be relevant, as one of the key elements of competitiveness today is the ability to attract intellectual capital and the question how the recent financial and economic crisis has changed this ability of EU member states can be asked. The question is relevant in relation to the diversity of effects that the crisis had on EU member states, including, the different levels of real economy adjustment constraints. Design/methodology/approach – The concept of competitiveness applied by the World Economic Forum (WEF) in constructing the Global Competitiveness Index (GCI) was used. Based on selected WEF GCI sub-indicators and the WEF’s methodology, we a new index named “Ability to attract intellectual capital” was generated. EU member states’ performance was compared along this indicator for the 2007-2008 (pre-crisis) and the 2013-2014 (post-crisis) periods. In this way, EU member states can be ranked before and after the crisis; their performance can be compared in the two periods, relatively to each other, and in relation to their performance along other relevant indices. Findings – The findings show interesting results. First, many peripheral EU member states, deeply affected by the crisis, could considerably improve their relative positions between 2007 and 2013. Second, the Central and Eastern Europe (CEE) countries show a rather mixed picture, drawing up rather different individual development paths. Third, the advancements in some countries do not imply that overall convergence is proceeding in the EU. Nevertheless, some countries have not wasted the “good” crisis to take those steps of structural reform. Research limitations/implications – Because we only look at two time periods (pre-and post-crisis), the authors are not able to describe the processes that were going on in the EU member states during the years of the crisis; the results can only show the difference between the two periods. Furthermore, there may be other methodological approaches to countries’ abilities to attract intellectual capital that may bring results different from this study’s results. For the countries who, according to our investigations, could improve these abilities, enhanced competitiveness is likely to occur in a few years’ time. Practical implications – For those countries aiming at improving their abilities to attract intellectual capital, or for EU policy design, this research may provide useful results. Moreover, not only this study’s results but also the methodology can be used by others, for other purposes: to compare different years, different sets of countries included in the WEF GCI or even along different dimensions. Social implications – This study’s research findings, the authors believe, will help EU member states and the EU as a whole in getting to know their abilities to attract intellectual capital better. In the introductory part of this paper, the aim was also to collect arguments from the economic theory to explain why such abilities are crucial for future competitiveness of countries. Originality/value – The methodology that was used is the adoption of WEF methodology, and the data are from the WEF GCI dataset. However, to the authors’s knowledge, no other research work has applied this methodology on this set of WEF GCI sub-indicators, with such purposes as to compare EU member states’ abilities to attract intellectual capital before and after the crisis.

Innovation and entrepreneurship as drivers of economic development

“…Research relating these three dimensions seems to be pertinent. In many cases, authors used secondary data, collected from international platforms such as the Global Entrepreneurship Monitor (GEM; Martínez-Fierro et al , 2016; Ferreira et al , 2017), the Global Competitiveness Index (GCI; Van Stel et al , 2005; Pelle and Végh, 2015) or the Organization for Economic Co-operation and Development (OECD; Cohen and Soto, 2007; Bergh et al , 2017).…”

“…However, and meeting the recommendations of future research by Galvão et al (2017), most of these works use these databases in isolation (Martínez-Fierro et al , 2016; Pelle and Végh, 2015) resulting in a lack of empirical test of the concepts of entrepreneurship, innovation and economic development simultaneously, given the nature of both GEM and GCI. On the other hand, the literature, despite a significant number of works (Guerrero and Urbano, 2017) that use the triple helix (TH) model, shows few studies that resort to the QH model, with a view to understanding the influence of society in the process of economic development.…”

The Influence of Intellectual Capital on the Financial Performance of Spanish New Firms

“…An obvious difference between the upturn and the downturn periods is that the SCE is statistically significant in the upturn period, rather than in the downturn period for the high-tech new firms. As pointed out by Pelle and Végh (2015), the 2008 crisis resulted in shrinkage in the investments in intellectual properties and intangible assets. Therefore, for new firms in high-tech industries, they may reduce the investments in R&D and then the innovation activities, which may negatively influence the SCE (because R&D as well as innovation belong to the structural capital of firms, according to Zéghal andMaaloul (2010) andDe Castro andSáez (2008).…”

“…Thus, investing in the human capital can benefit new firms in the long term. Regarding the statistical insignificance of the HCE in the downturn period for high-tech new firms, this may be because of the shrinkage in the investments in intangible assets in the crisis period (Pelle and Végh, 2015).…”

Intangibles and performance in oil and gas industry

“…Oil and gas companies are characterized as an administrative adhocracy, meaning that each company exists with a right to produce its own product through complete vertical integration strategy (Alvesson, 2011). Owing to its deep involvement in petrochemical and energy research, and certainly to a more intensive reliance on other energy sources, the oil and gas sector must adapt its business model even beyond the research part (Grant, 2013;Pelle and Végh, 2015). Although oil and gas industry is claimed to be becoming a knowledge-intensive industry (Hjelle, 2012), there are only few empirical studies in this field.…”