Entrepreneurs’ perception of outcomes from intellectual capital investments

Abstract

Purpose of the article The goal of the paper is to reflect the results of the authors’ conducted survey among Latvian business sector representatives that was aimed to get an insight into the level of awareness about intellectual capital investments. Methodology/methods To achieve the established goal the survey among representatives of Latvian 203 companies is conducted. The most companies represent production, service and trade industries of the national economy. Survey instru-ments is the authors’ developed questionnaire that involves fourteen questions: six of them are respondent profile questions, and the remaining are aimed to determine the core of the concept of intellectual capital on the viewpoint of respondents, the importance of the intellectual capital perceived by respondents, the expected results from the intellectual capital investments. Respondents’ answers were evaluated within the respondents’ groups, based on the profile criteria, such as company’s age, size, financial performance, location and business sector. Data processing was completed in SPSS environment, using analysis of frequencies, ranking and independent samples T-test. Scientific aim The goal of the current research is to evaluate the perceived importance of the expected results from the intellectual capital investments by Latvian entrepreneurs, and reveal the difference in perceptions caused by the differences in companies’ profiles. Findings Research results show that most perceived outcomes form IC investments are financial outcomes. Significant differences in evaluations of representatives of different kind of respondents are observed. Depending on company size, age of activities and location of company (Riga and non-Riga) importance of expected outcomes is different. Large and old companies pay attention not only to financial outcomes, but also to non-financial outcomes. Analyzing perceptions of outcomes by location of company, authors find that there are differences only in two outcomes evaluations. Companies in Riga evaluates “reputation and brand value enhancement” higher, than companies in regions. But companies in regions evaluate “cost reduction in the future” higher than companies in Riga. Conclusions (limits, implications etc) In contemporary economics situation in Latvia, microcompanies and “new” companies have limited amount of resources for development. Usally their strategy based on activities, which provide company existance at the present moment. Large and “old”companies have better financial conditions and built their strategies on sustainable development principles. They take into account not only possible financial outcomes from the IC investments, but also non-financial outcomes.