Public stockholders focus mainly on return on invested capital, which narrows senior management's range of acceptable strategies (including innovation).
Private capital providers (personal, family, friends, and local banks) do not have limited a similarly focus,
Chemstation has used a franchise business model to expand rapidly nationally without the need for the founding entrepreneur to raise any external capital.
19 The Needs of Technology Developers Looking Beyond Seed Capital...21 The Added Value of R&d for Lead Technology Users...
One of the most important implications of globalisation is that the comparative advantage of OECD nations is shifting away from traditional factors of production, such as land, labour and capital, towards knowledge-based economic activities.
Substituting capital and technology for labour, along with shifting production to lower-cost locations has resulted in waves of corporate downsizing throughout Europe and North america.
1) capital equipment or input-embodied innovation, and (2) design innovation. In capital equipment based innovation firms acquire new process technologies or intermediate products
capital and land because the value of knowledge is intrinsically uncertain and its potential value is asymmetric across economic agents. 9 Investing in new knowledge is a risky activity that most SMES cannot justify.
Other key factors generating new economic knowledge include a high degree of human capital, a skilled labour force,
and high investments in human capital. -Continual innovation. Both the nature of the products, as well as production and organisation methods, are continually being improved.
are principally are intangible assets like proprietary knowledge or a position of market leadership or human capital.
Globalisation has shifted clearly the comparative advantage of OECD countries away from traditional inputs of production land, labour, capital and toward knowledge.
so is by increasing the amount of capital available for access to or investment in innovation and new firm creation.
The Needs of Technology Developers Looking Beyond Seed Capital 73. Several studies have shown that public funding in the form of R&d grants plays a decisive role as seed financing for high tech and potentially high growth SMES.
It is worth mentioning that R&d grants are considered often by these start-up ompanies as cheap sources of seed capital
Governments should encourage such a trend by improving the conditions for private capital investments to support SME innovation. 77.
Public R&d grants were the only viable source of seed capital in Europe during most of the eighties and early nineties, a period during which high tech,
First, the amount of European seed capital from nongovernment sources has been rising constantly. Although these sources of seed capital are much more expensive than a public R&d grant
or loan (EVCA figures show that seed capital funds earned in 1998 about 36%on their invested capital per annum),
they are obtained easily and can be spent with great flexibility (within the limits of a business plan).
since these firms do not have the cash flow or capital to initiate R&d activities,
But the emergence of private capital sources reduced the necessity of public grants for this group.
if no seed capital is available, its development should be stimulated. 98. The second group, the leading technology users, has benefited the most from the recent SMEFRIENDLY programmes introduced by many OECD countries.
WK1 36 Zucker, L.,Darby, M. and Armstrong, J.,1994,‘Intellectual Capital and the Firm:
Although I did not propose a specific model to handle SME performance in relation to companies'external environments, I presented indicators, in the form of various types of capital,
human capital, financial capital, system capital, and open capital. All are aggregated under one concept: innovation capital.
SME performance, performance evaluation, firm efficiency, SIV model, SMES, innovation capital, human capital, financial capital, system capital, open capital, open
i P Profit margin i C1 Initial investment capital si C1 Self-financed initial capital i C2 Costs for the intake and absorption of new technologies a b A a,
Managing innovation in a globalized economy defining the open capital. In Allam Ahmed (ed.),World Sustainable Development Outlook 2009:
and the intended performance evaluation model 38 Innovation capital 42 A comprehensive approach to constructing an SME performance model 43 3. Methodology 54 Research methods in social sciences
Managing Innovation in e-Globalized Economy Defining the Open Capital 78 Paper 7: Implementing the SIV model on an Intensively Innovation-Oriented Enterprise:
initial investment costs, self-financed initial capital of investment, and profit margin (a neutral percent figure).
human capital, financial capital, system capital, and open capital. The overall argument is that if evaluation performance models are to be used in helping SMES plan their survival and growth activities,
I used a ratio between the self-financed initial capital and the initial investment capital.
I selected financial capital and human capital from the literature review. Regarding the system capital
I proposed that capital due to the realization that institutions and players'ability to promote innovation activities in society play an important role in supporting SME activities.
Meanwhile, open capital is a reflection of the emphasis on firms'networking capacities and the issue of firm performance and innovation.
The shareholders tend to think mostly of selling the firm to get the best possible return on invested capital, especially upon the slightest indication of trouble.
This is accounted for by the introduction of the concept of Innovation Capital covered by the third part of the thesis. The thesis starts with an introductory chapter, in which
Higher productivity of economies was attributed to investment in capital, which is mainly related to knowledge (Schultz 1959).
Teirlinck and Spithoven 2008). 42 Innovation capital Two types of capital are mentioned often in relation to innovation capacity:
human capital and financial capital (Abouzeedan and Busler 2004. In addition to these two, there is also a third:
system capital (ibid. System capital should not be confused with structural capital. Structural capital, in its classical context, is embedded an component in the intellectual capital concept (Allee 1999, Zangoueinezhad and Moshabaki 2009, Depablos 2004, Sveiby 1997.
Intellectual capital relates to the intangible assets of an enterprise (Sveiby 1997, Sveiby and Risling 1986, Edvinsson and Malone 1997, Roos et al. 1997.
Structural capital, as well as human capital and external capital, may be discussed in respect to an enterprise's intangible assets (Allee 1999).
Allee (1999, p. 126) defined structural capital as, Systems and work process that leverage competitiveness.
According to him, it is delivered the competencies as codified knowledge in the internal environment of the firm
and that is why it is referred also to as internal capital (ibid). Based on the definition above, it is evident that structural capital is different from the system capital used in papers 4, 5,
and 6 of this thesis. There are two main aspects of that difference. Firstly, system capital is more related to existing input from the external environment.
Such input comes from societal and governmental organizations and institutions. Secondly, system capital indicates both tangible as well as intangible assets supplied to the firm as external input.
Technical change may increase the relative productivity input of human capital if education and other skills assist in rapidly applying new technology within the firm (Adams 1980,
Nelson and Phelps 1966, Welch 1970, Schultz 1971. One way to express the quality of human capital in a country is to look at labor productivity (Adams 1980.
Mankiw et al. 1992) introduced human capital explicitly in his production function. People constitute any organization's core resource for competitiveness (Rastogi 2000.
On the other hand, if an increase in labor-productivity is related only to an increase in working hours and not to a net production output,
then the increase in productivity will add little or nothing in respect to competitiveness as measured by income per capita (Corley et al. 2002).
In knowledge management literature, R&d and human capital are merged typically under the categories of receiver competence (Eliasson 1990), knowledge base,
and absorptive capacity (Cohen and Levinthal 1989,1990). In general, human capital is transferable and facilitates the accumulation of specific human capital (Ballot and Taymaz 1997).
Such mechanisms lead to competence-building, thus emphasizing to the researchers the importance of receiver competence (Eliasson 1992).
Abouzeedan and Busler (2004) 43 argued that innovation expressed as R&d can be incorporated with human capital in relation to intangible assets.
Financial capital is coupled often with R&d and innovation activities. Lichtenberg's (1992) study of the manufacturing sector's productivity in relation to R&d investments did not consider cross-country effects.
Earlier works on the competitive advantage of organization emphasized tangible resources, such financial capital and location (Scott 2003.
the initial investment cost and the self-financed initial capital of investment. One does not find these parameters in the classical models,
The ratio of self-financed initial capital of investment to initial investment costs provides a good indication of the degree to
The second subset of parameters includes the initial investment costs and the self-financed initial capital of investment;
although a very good conceptual platform, does not quantify the levels of the various components of the innovation capital (a). The IBAM was developed out of the existing literature.
Same as in (d) above. 6 The discussion about open capital stems from the open innovation concept advanced by Chesbrough (2001,2003.
These components are human capital financial capital, and system capital. The validity is enhanced also, as the group of countries analyzed using the IBAM tool are located in the Arab World.
The countries of that region have wide variations in the availability of the three components of innovation capital.
because the difference between the levels of the three components of capital is exaggerated highly. The level of differentiation between the intensity of innovation capital components enhanced the validity of the study's analysis. The discussion about open capital originated in paper 6
through its introduction of the open innovation concept advanced by Chesbrough (2001,2003. The paper also drew from the general discussion about the impact of information and communication technologies on firm activities.
The IBAM tool was developed in papers 4 and 5, out of the existing literature about the components of human capital, financial capital,
the discussion about open capital is originated through the introduction of the open innovation concept advanced by Chesbrough (2001,2003.
We wanted to look at the components that present the input capital into the innovation vitality of an economy from the perspective of individual firms'needs and external environments.
In that paper, the concept of Innovation Capital was introduced first. One year later, in 2005 the paper was reworked
The paper introduced innovation capital as a new concept comprising three components: human capital, financial capital,
and system capital. Summary of paper 4 This work introduced a new type of capital innovation capital.
In the paper, we argued that innovation capital can be used as an indicator for the degree of richness of the entrepreneurial environment in a region,
The paper also introduced another new type of capital as a component of innovation capital:
System capital is related to the input of the society and its institutions in support of the entrepreneurial and innovation activities of firms.
To analyze the different possible scenarios resulting from the imbalance among the components of innovation capital,
We argued that the three components of innovation capital must be in balance in order for an economy to be innovative and entrepreneurial in nature.
Each Arab country enjoys an abundance of one of the three components of innovation capital but shows a clear deficiency in the other two components.
in order to facilitate the flow of the type of capital among these countries. Contribution of paper 4 to the purpose of the thesis The innovation capital richness of a society is determined by its availability and that society's balance of the three components of innovation capital (human, financial, and system capital.
Existing models also lack clear connection to system capital because they do not take in consideration the societal input.
The IBAM tool helps researchers to assess this input by stressing the need for balance between human capital, financial capital,
Although the discussion about the three types of innovation capital is meant not to provide a 76 model for measuring firm performance in relation to the external environment of the firm,
One way to look at the question is to use deductive analysis regarding the forms of capital that contribute to the entrepreneurial external environment of firms.
One way to look at the question is to apply deductive analysis to the forms of capital contributing to the entrepreneurial environment of a given society.
The analysis provided uses the three components of innovation capital (human capital, financial capital, and system capital) and provides input indicators to build upon models of performance that consider the external environment of the firm.
Paper 6: Managing Innovation in e-Globalized Economy Defining the Open Capital This paper was published in Allam Ahmed (ed.),World Sustainable Development Outlook 2009, The Impact of the Global Financial crisis on the Environment, Energy
and Sustainable Development, World Association for Sustainable Development (WASD), Part VII, Knowledge management and Education, Chapter 30, pp. 287 294, Abouzeedan, M.,Busler, M,
open capital. The paper was rushed into formulation and presented at the WASD conference in Manama, Bahrain during the period of November 9 11,2009.
Summary of paper 6 In the working paper of Abouzeedan and Busler (2004), we proposed a new type of capital (i e. innovation capital.
Innovation capital was meant to serve as an indicator for the degree of richness of the entrepreneurial environment in an economy.
open capital. The paper also reflected on how the four components of innovation capital are interconnected.
To distinguish the concept of open capital from the usage of open capital in classic financial management literature,
the paper introduced a number of dimensions related to open capital as a component of innovation capital.
Contribution of paper 6 to the purpose of the thesis At the external environment level, the input indicators that are candidates for performance are the four components of innovation capital:
human capital, financial capital, system capital, and open capital. Classical firm performance models were built in a period
and openness are reflected also in the introduction of the open capital concept at the external environment level.
and 6 analyze the nature of innovation capital in relation to the external environment of the firm.
which can be used to analyze the four components of innovation capital (human capital, financial capital, system capital,
2) innovation capital and its relevance to firm performance; and 3) how the SIV model can remedy the deficiencies of the existing models.
Innovation capital and its relevance to firm performance The innovation capital availability of firms is determined by their richness and their balance of the three traditional components of innovation capital (human, financial,
and system) as well as the open capital. A firm's innovation capital is analyzed in relation to the external environment of the firm by use of the Innovation Balance Matrix (IBAM.
The connection between the internal and external environments of the firm, as relates to firm performance,
Existing models lack a clear connection to system capital, as these neglect variations in the firms'business sectors, locations, external environment conditions,
open capital. It is important that the desired SME performance model facilitate the bridging of the SME's internal environment analysis to the external environment related issues of innovation using the IBAM analysis tool.
and openness are reflected also in the introduction of the open capital concept at the external environment level.
open capital. For a single firm to engage actively in innovation it requires input from society via four important components of innovation capital (human, financial and system capital papers 4 and 5,
as well as open capital paper 6). The Innovation Balance Matrix (IBAM) played a vital role in this discussion.
and provided insight into how the different components of Innovation capital are related to each other. Although papers 4 and 5 do not discuss a specific model to assess firm performance in relation to the external environment of the firm
and also open capital see paper 6). The Innovation Balance Matrix (IBAM) played a vital role in this discussion.
The tool is used to analyze the level of each of form of capital and provides an insight into how the different components are related.
open capital (paper 6). The analysis performed in papers 3 and 7 exemplified the approach needed in the model to address the issue of innovation impact on SME performance.
the intake and absorption of new technologies as indicated by investment and the total costs of production, the initial investment costs, the self-financed initial capital of investment,
human capital, financial capital, system capital, and open capital. ASPEM as a new tool for strategic utilization of SME performance models To the best of my knowledge, the existing SME literature lacks a strategic approach for researchers to use the performance models.
Traditionally, the discussion about different types of capital in relation to an economy's ability to be centered innovative around two basic concepts:
human capital and financial capital. In the context of this thesis, I proposed a new form of capital to cover the ability of public institutions
and private organizations to support the entrepreneurial environment in a country. This third type was designated as system capital.
This form of capital is concerned more with societal input into the innovation activities of an economy.
open capital. I combined the four types of capital into a new form of capital, innovation capital.
Innovation capital presents the accumulated input of technology in relation to the firm's external environment that promotes innovativeness and the entrepreneurial drive of the economy.
The optimal situation is one where the four components of innovation capital are relatively abundant at the same level.
I did not include open capital. I only considered human capital, financial capital, and system capital.
Open capital should be integrated as a fourth component of innovation capital in any future work using the IBAM tool.
The Arab countries presented a unique case, where each country has an overflow in only one component capital,
while the other two components are in poor shape. Although the concept capital is built not into the SIV model,
the SIV model can be used as a performance input indicator to build models at the aggregate level of the economy.
and the resources (or capital) available to use at the external level of the enterprise,
the ideas related to innovation capital and the IBAM tool can be used as indicators and inputs for such a model. 102 103 References Abouzeedan,
Relative capital formulation in the United states. Journal of Political economy 88 (31), 561 577. Adizes, I. 1987.
Measuring and reporting structural capital: lessons from European learning firms. Journal of Intellectual Capital 5 (4), 629 647.
Dhanaraj, C. and Beamish, P. W. 2003. A resource-based approach to the study of export performance.
Intellectual capital: Realizing your company's true value by finding its hidden brainpower. New york, New york:
Technology as social process, a commentary on knowledge and human capital. Journal of Economic Issues 18 (2), 573 580.
Sustaining enterprise competitiveness is human capital the answer? Human Systems Management 19 (3), 193 203.
Intellectual capital: Navigating in the new business landscape. London, UK: Mcmillan Business. Ross, D. M. 1996.
Investment in human capital: The role of education and of research. New york, New york: Free Press.
The role of structural capital on competitive intelligence. Industrial Management & Data systems 109 (2), 262 280.
which make up physical capital. Veblen viewed technology as an indivisible possession of the community at large,
whereas the concentration of capital over the years has given rise to the domination of large firms and their research and development departments.
but because there is political capital to be gained in this recognition. The politician and the innovator play the political capital card,
Vernon, R. 1974) Les conséquences économiques et politiques des entreprises multinationales, Paris, Robert Laffont Wolfe, D. 2002) Social Capital and Clusters
etc) Equity (Public or Private) Seed Capital Venture capital Seed/Start-up Emerging growth Debt financing Bank loans Guarantees Public loans Emerging growth Development
IDEA as the manager of the initiative, the Capital Investment and Risk management company of Andalusia INVERCARIA,
as URBACT projects are grouped into nine areas of expertise including‘innovation and creativity'and‘human capital and entrepreneurship'.
analyses and scenarios on territorial dynamics and (2) revealing territorial capital and potentials for development of regions and larger territories contributing to European competitiveness, territorial cooperation and a sustainable and balanced development.
guarantees schemes, seed capital and venture capital. We have seen that access to financing is one of the most important barriers impeding innovation in SMES.
building from a group of‘edge cities'(cities on the edge of the major capitals of Europe) grouped under the Edge Cities Network (ECN).
a network that brings together towns and cities on the edge of the major capitals of Europe.
Structural change, not just the accumulation of capital, is a driver of economic growth. As such smart specialisation aims to accelerate structural change by encouraging the transformation of economic activities from a structural perspective.
The advances in ICT, the increase in human capital in public administrations and closer public-private interactions between industry and government at various stages and levels of INNOVATION-DRIVEN GROWTH IN REGIONS:
Preserving the margin for public investment in knowledge-based capital so that it contributes to productivity growth will be increasingly important not only in the medium term but also in the longer term in light of challenges such as demographic change and competition from emerging economies.
and change over time (e g. human capital)( e g. OECD, 2011; Redding, 2002. World prices of natural resources (e g. energy) and input factors as well as technology or the discovery of new factor endowments can change comparative advantages.
Furthermore, demand factors such as the level of human capital and income per capita of a country's trading partner create specific patterns of taste and,
Some examples include expenditures on innovation and research and development in specific sectors, the availability of human capital for certain scientific, technological and economic areas, the presence of IT-infrastructure in specific sectors
Capital D (design) en Brainport Health Innovation are important examples. In 2010 Brainport developed, on request of the central government and parallel to the already existing airport and seaport visions, a cohesive and comprehensive future vision.
iii) Lacking critical mass on human capital in public) R&d and; iv) Growing gap of R&d HR resources, especially in the engineering sciences (Brain drain.
The economy of South Moravia is driven by firms concentrated in the regional capital (the city of Brno), a dynamic and innovative centre and the second largest city in the Czech republic (500 thousand inhabitants in the city agglomeration),
The state governments of Berlin and Brandenburg came in August 2006 to an understanding about a common model called Capital Region Berlin-Brandenburg.
An asset that should not be underestimated is the social capital available in the regions. The self-organisation of clusters and other loose networks
wasteful duplication and dissipation of the potential agglomeration economies at system level as a multiplicity of imitative local government authorities compete to attract the small finite pool of mobile capital,
the availability of human capital for certain scientific, technological and economic areas, the presence of IT-infrastructure in specific sectors, etc.
For the mapping of human capital educational data, such as the number of students enrolled in different educational programs could be of relevance.
and education in general form part of human capital and according to human capital theorists these assets can improve SME productivity significantly (Honig, 2001).
Entrepreneurs who have built high-growth companies have solid entrepreneurial and management skills. Competency in a variety of skills will contribute to the profitability and sustainability of a business (Chrisman and Mcmullan, 2000),
According to Gaither and Frazier (1999), SMES constantly experience shortages in capital to employee skills to improve production capacity,
and it may be essential that human capital in an effective team configuration accompany the transfer'(Teece, 1980, p. 228). 738 F. Bougrain,
. 7) Automobile 2 0 0 1 3 2 1 2 11 (3. 5) Capital goods 29 17 37 20 19
. 827)- 1. 7413*(-2. 050) Capital goods industry-0. 4124(-1. 324)- 0. 3416(-1. 049)- 0. 4722+(-1. 829
If a decoding does not happen, the assimilation of external knowledge to the firm's‘technological capital'(Le Bas and Zuscovitch, 1993,
/25 What processes are most likely to LEVERAGE THE VALUE OF OUR INTELLECTUAL CAPITAL? In a number of areas today, technology is emerging more rapidly than societal systems can comprehend
New models for capitalizing on intellectual capital are being developed, the objective being to create both societal value and business value.
Innovation and social capital in the small-medium entreprises: A case of bamboo handicraft in indonesia.
Entrepreneurial capital: The emerging Venture's most important asset and competitive advantage. Journal of Business Venturing 17: 275-90.
increasing resources such as capital and labour; and using resources in more efficient ways, for example through technological development.
and support of innovation (especially due to the 32%decrease in venture capital) and of enterprises introducing innovation show a deteriorating situation.
Lack of capital by the SMES, weak innovation and growth ambitions and abilities in global comparison.
The level of seed capital is low and the technological incubation processes are inadequate. The processes of technology transfer are not efficient enough
the low quality of venture capital (where seed capital is only component), the innovation weaknesses of the SME sector, the low patent activity and the shortcomings in the co-operation networks within the innovation system.
and social capital (see KRPIH (2008)), while economic sustainability refers primarily to the requirement of maintaining macroeconomic balance.
voucher-like support) that improve their survival chances in the early stage of the life cycle. 3) Support for preparing young enterprises for market-based financing 4) The strengthening of the role of seed capital
In the case of market failure, the government intervenes where investments into human capital, infrastructure or capital bringing maximum benefits cannot be realized through market forces.
Fiscal instruments (e g. taxes) Systematic interventions Other regulation (e g. qualification) Capital market instruments Systematic interventions Venture capital (e g. seed capital) Guarantee (e g. for market development) Direct instruments supporting RDI Supply-side instruments
and capital-,loan -and guarantee-type financial instruments. Without enhancing public R&d funding, it is not possible to achieve the targeted 1. 8%GERD/GDP ratio commitment of Hungary set out in the framework of the Europe 2020 strategy.
and other policy aspects (in the form of grants) and the capital-and loan-type financial instruments will have pronounced a more role than before.
The use of financial instruments for RDI purposes (e g. seed capital and venture capital: in an annual amount of HUF 2-3 billion.
Private capital provides companies not listed on the stock exchange with share capital. The private capital is provided for developing new products,
introducing new technologies, increasing circulating capital, buying-ins and improving the balance sheet of the company.
Strictly speaking, venture capital is only one subset of private capital investments that are used for starting companies,
starting knowledge-intensive enterprise which can produce fast growth small with a small investment in capital or Labour policy:
System-dynamical approach 28 ábra National level Human resources human and social capital Science system research capacity The development of the economy and the markets absorption capacity
Priority funding for corporate and regional innovation by means of tenders and capital market instruments.
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