Understanding dynamics of intellectual capital of nations

Purpose – The paper aims at creating understanding on the dynamics of intellectual capital (IC), which has emerged recently as one of the major issues on the research agenda. The theme is studied from a national point of view. Design/methodology/approach – The analysis has been conducted using data from the IMD Competitiveness Report covering the data of 51 countries from the years 2000‐2005. Data analysis is aimed at analysing time dependent relationships between intellectual capital and GNP growth. The research provides parameters of four types of effects for a nation's GNP growth: sustaining effects, boosting effects, linear growth potential and exponential growth potential. Based on the developmental stage of the countries they were grouped to: developing; transitional; and developed countries, and the effects of IC was studied within and between these groups. Findings – The analysis specifies the types of IC factors that have important effects on economic growth on different level of economics. The analysis also provides an analytical framework for designing the context in which IC of nations can be adequately considered in the mid‐long term perspective. Research limitations/implications – The research has to be considered as exploratory. It has been conducted using only one database with certain limitations. Further research is needed especially by integrating other components of intellectual capital, e.g. reputation, decision‐making processes, and cultural dimension. Practical implications – From a practical perspective the findings also provide important guidelines and framework for policy makers. Originality/value – This paper provides a new view on the dynamics of IC at national level by relating IC ingredients to economic performance and specifying under which circumstances IC has important effects on national GNP growth.