Books Read: “Managing Intellectual Capital”, Teece   Leave a comment

This academic puts his finger squarely on the problem: “knowledge, competence & related intangibles have emerged as the key drivers of competitive advantage in developed nations”.

Thus, the essence of the firm in the new economy is its ability to create, transfer, integrate, protect & exploit knowledge assets. That is, its intellectual capital.

So, a firm needs dynamic capabilities as well as knowledge assets. This dynamic capability is the ability to sense and then seize new opportunities, to reconfigure and protect knowledge assets, competencies, complementary assets & technologies, and to achieve sustainable competitive advantage.

Whilst a large part of the book is spent on how to manage intellectual capital in different fields, for example market entry strategies, licensing options & public policy, the foundational concepts espoused are sound.

And again the innovation meme. This innovation meme that is central to our modern economy. Teece maintains that in order the maintain competitiveness firms need to adopt innovation strategies that force change. These strategies are:
– increase exposure to ideas and approaches external to the firm
– design organisational structures and incentives to catalyse and reward creative action
– promote the continual shedding of established assets and routines

For me, this book again demonstrates the centrality of innovation to organisational effectiveness.

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