Author(s):
1. Nada Trivic, Zimbabwe

Abstract:
Key economical and developmental factor for agrarian epoch was land, for industrial was labour, and for the economy of XXI century it is knowledge or its economic equivalent – intellectual capital. “Old economy” draws its competitiveness from the cheap labour, raw materials, energy, technology, mechanization, and later automation, while the “new economy” draws its competitiveness from high technology, knowledge and innovation. Currently, there is no stronger competitive force than the one based on intellectual capital. It is why it could be argued that intangible assets are the main factor of competitiveness of present-day enterprises. Rapidly changing and progressively uncertain business environment forces companies to assess their competitive advantage and the approach to oppose competition. Competitiveness depends on the knowledge the company encloses, how it puts it into use and how adaptable to new knowledge company is. New sources of competitiveness should be: valuable, rare and hard or impossible to copy. Stated ability characterizes only intellectual capital. Therefore, obtaining and maintaining competitive advantage is only possible by acquiring knowledge, especially in terms of creative vitality. Intellectual capital, as a resource, is not limited and could not be exhausted. Thus, employment of this resource in the production process leads to continuously increasing revenues and decreasing average costs. This is similar to natural monopoly. It could be argued that the law of diminishing (marginal) returns does not hold for the knowledge as a resource, but the law of (exponentially) increasing returns. However, in a production the intellectual capital itself could not be used in isolation and it is combined with land, labour and capital. Thus, that greater use of intellectual capital (rather than use of land, labour and capital) is more favorable for the company. Sustainable competitive advantage is the goal of every company, as it contributes above-average profit that is imperative in contemporary business world: self-preservation with constant growth and development of a company. It is the result of continuous successful use of intellectual capital. In a dynamic sense, sustainable competitive advantage is the element of intellectual capital that helps achieving sustainable competitive advantage in upcoming situations and changes. That is, above all, the ability of all employees to effectively respond to change. The fact is that in last two decades the share of intangible assets to total value of companies is increasing, while the role of property is decreasing. Furthermore, in the price structure the increased participation of immaterial factor is noticeable. Nevertheless, intellectual capital is ignored and is regarded as a cost, not as investment and development potential.

Key words:
Knowledge, intellectual capital, innovation, competitiveness

Date of abstract submission:
25.05.2012.

Number of visits:
503

Conference:
REDETE 2012

Applied paper from author