Intellectual Capital: Capital Market's Cinderalla and Cassandra- In Retrospect and in Prospect


Anthony Thiagarajan
Dr. Utpal Baul


Purpose–The purpose of this paper is to explore the practical implications of an epistemological approach to intellectual capital (IC) in the context of the capital markets. It draws on the theory of IC and the capital market actors. The purpose of this paper is to demonstrate that market capitalization (market cap) of many countries outweigh their GDP.  This market cap is represented by IC but which deplorably is ignored by the stakeholders to a large extent – out of ignorance, indifference and lack of ethics, governance and compliance. The article drives home the point that the rules of business are being rewritten and the industrial era enterprise models are no longer adequate to meet the dynamic condition of a changing world market. Hence, the need for thinkers and thought leaders to chart new paradigms and new directions to view IC as strategic investments of organizations.

Design/methodology/approach–This paper through critical reflection addresses the content elementsof the strategic nature of the holistic intellectual capital and how the capital market actors from the demand and supply side view it through the prism of financial market behavior. .  It also for the first time comes out with an optimization model of Sustainable One World of Stakeholders juxtaposed with the raison d etreof IC-driven business framework wanting all those who matter to be on same page for a better, one world.

Findings– IC makes a strategic differentiation in contemporary business being the catalyst for market capitalization.  Despite being an alchemist to transmute IC into business excellence and the realization by stakeholders of its stellar  role in the world economy, it does not get a place of primacy it deserves by the demand-side and supply-side of the  capital market participants. This paper highlights and provides fresh insights on the need to look IC as a game-changer by the capital market actors (demand-side and supply-side)  and powers that be as gate-keepers and conscience-keepers to foster IC-driven business growth.

Originality/value– To the best of the authors knowledge so far there are no studies published that provide a detailed discussion relating IC to capital market participants.  This paper by offering a critical lens through which to enrich extant IC literature for the first time extends the frontier of IC knowledge offering a new path and demonstrating  that there is a need for  scholars,  practitioners and other stakeholders of IC to pursue possible avenues to further develop the visualization, management, measurement and reporting of IC.  It also allows stakeholders to understand the barriers to implementing IC in organizations and do self-introspection. Given the exploratory, conjectural nature of this article relating to an optimization  IC model and the capital markets and non-existence of research literature on the IC-driven one-world philosophy and practice, issues and ideas discussed in this article  will inevitably require further conceptual exploration and fundamental research.  The intent of the article is to further debate and research on   IC-based business strategy aimed at improving the capacity-to-act both inside and outside the organization. The constructed heuristic tools serve as a basis for rigorous empirical testing through systematic investigation of the theoretical underpinnings of IC strategy thereby throwing up considerable potential for future research – both pure and applied bringing in its train green shoots to be bullish on IC.