Prioritizing Intellectual Capital Assets for Strategic Investment Using an Analytic Network Process Approach

Abstract

Intellectual Capital Assets (ICAs) refer to the intangible resources that are critical to the creation of organizational value out of human, customer, innovation and process capital. High impact ICAs should be identified and prioritized for investment in by organizations as they strive to increase their value. This research aims at assessing and ranking ICAs by using Analytic Network Process (ANP) model for capturing the interactions between the assets. The method used to gather the pairwise data aimed at supervising CEOs, scientific supervisors, shareholders, employees and customers in order to determine the relative value each ICA contributes to value creation. A mathematical model is employed to translate qualitative assessments into quantitative results with regard to Consistency Index (CI) and Consistency Ratio (CR) to check the reliability of the judgments. Cost benefit analysis shows the ICAs which yield the greatest return on investment. Our findings suggest that knowledge sharing and innovation are the most dominant ICA that positively and significantly affects value creation. These assets involve moderate investment but have huge returns, while other assets such as employee training and customer relations also have greater potential but involve high investment. The results offer practical guidance to organizations in terms of how to effectively prioritize ICAs to support their achievement of strategic objectives in creating innovative value.