Creating and sustaining economic growth through HR

With the rise of the knowledge economy, the importance of intellectual capital has grown. The concept of intellectual capital was raised by Galbraith in 1969, since when the market to book value of corporations around the world has increased dramatically. The implication of this phenomenon is that value creating factors have shifted from tangible assets to intangible ones. Thus, in order to create and sustain economic growth, there is a need for both scholars and practitioners to break down the value creating process and identify the crucial intellectual capital that creates value. However, there is no consistent definition of intellectual capital. For example, Chen et al. (2004) argue that intellectual capital includes human capital, structural capital, innovation capital and customer capital. Human capital is the source of all intellectual capital, and through structural capital and innovation capital, human capital can enhance customer capital. Wang and Chang (2005) use the Taiwanese information technology industry as an example and conclude that by using the human capital, performance can be increased through the enhancement of innovation capital and process capital. Sveiby (1997) suggested that market value is created by tangible net book value and intangible value, which includes external structure, internal structure and individual competence. Edvinsson and Malone (1997), using a similar structure, argue that market value is composed of financial capital and intellectual capital, including human capital, structure capital and customer capital. Edvinsson (1997) also mentioned a ‘Skandia navigator framework’, arguing that in the past, ‘human capital’ is provided only in the form of ‘labor’ in corporations, and tangible assets such as machines are the source of value, so a historically based financial analysis is enough to modify the