Sustainability, Economic Complexity, and Intellectual Capital

Dear Colleagues,

The core concept of economic complexity (Hidalgo and Hausmann, 2009; Hausmann and Hidalgo, 2013; Hausmann et al., 2014) is that specific products or services are produced when knowledge, natural resources, and monetary capital come together in a specific way—with each economy having its own combination of the three factors. The economic complexity theory proposes that because natural resources and monetary capital are scarce, by increasing the amount of knowledge in an economy, more products and services can be made available for production, specifically for export.

Intellectual capital defines the available resources into five categories, namely: monetary, physical, relational, organizational, and human (including knowledge). Intellectual capital theory (for an overview see, e.g., Guthrie et al., 2017, and Roos, 2019) proposes that it is the unique system and pathway established to transform these resources, which enables new products and services to be generated. Lerro and Schiuma (2008) and Chao et al. (2015) have shown that it is possible to look at a region through the intellectual capital lens and to gain insight into a given region’s development (see Roos, 2014 for an example, and Januškaitė and Užienė, 2018, for an overview), and this means that it is also possible to look at an economy as a whole through the intellectual capital lens and gain insight.

The move towards a more sustainable economy is more complex than it may appear because of the challenges of limited input resources (e.g., raw materials) for some production chains (e.g., permanent magnets); the lack of necessary technical processes at an industrial scale (e.g., recovery of constituent material from permanent magnets); not having an appropriate system frame when considering increasing sustainability (e.g., missing the environmental impact of the energy use in digital processes—the bitcoin calculations during 2019 used more energy than the whole energy use of Switzerland or 0.25% of the worlds energy consumption); not considering energy use when discussing circular economy issues; not taking into account that some processes are irreversible (e.g., cement production); and not considering the second law of thermodynamics, which states that the useful energy (exergy) constantly reduces in a closed system, and that increased complexity in the system requires increased energy use and generates increased levels of waste (for a summary of these issues, see Roos, 2020)

From the above, it is clear that economic complexity theory and intellectual capital theory are complementary and partly overlapping. This can be seen by considering that any given economy is also influenced by both relationship resources (e.g., cultural propensity to collaborate, network economic effects due to economic agent density, knowledge network centrality, etc.) and organizational capital (e.g., policy landscape, rules, regulations, systems, processes, etc.). These two additional forms of resources are not presently captured in current economic complexity modelling, with limits on the explanatory power (which is still higher than most models) of economy-wide performance as a consequence. Given the complexities around moving to a higher value-creating sustainable economy, it is likely that both of the above-mentioned theories can provide useful insights and guidance.

The focus of this Issue is to cover research and thinking that combines these two theoretical streams, in order to increase the explanatory power and thereby further improve the toolbox of policymakers, especially in the move towards a more sustainable economy.

The Special Issue is organized around four main themes:

1. Linking Economic complexity and Intellectual capital to generate new insight that can be useful in the move towards a more sustainable economy
2. Empirical studies that combine economic complexity with intellectual capital and sustainability
3. Contributions to industry policy from combining the intellectual capital and economic complexity perspectives under an overarching objective of increasing the sustainability of the economy
4. Contributions to firm strategy from combining the perspectives of sustainability, economic complexity and intellectual capital

References

1. Chao, L., Xiao, L., & Lingyu, X. (2015). The influence of regional intellectual capital on regional economic development-evidence from China. International Journal of u-and e-Service, Science and Technology, 8(6), 91-104.
2. Guthrie, J., Dumay, J., Ricceri, F., & Nielsen, C. (Eds.). (2017). The Routledge companion to intellectual capital. Routledge.
3. Hausmann, R., & Hidalgo, C. A. (2013). How will the Netherlands earn its income 20 years from now? A growth ventures analysis for the Netherlands. The Hague: The Netherlands Scientific Council for Government Policy (WRR). Retrieved from https://english.wrr.nl/publications/publications/2013/11/04/how-will-the-netherlands-earn-its-income-20-years-from-now
4. Hausmann, R., Hidalgo, C. A., Bustos, S., Coscia, M., & Simoes, A. (2014). The atlas of economic complexity: Mapping paths to prosperity. Cambridge, MA: MIT Press
5. Hidalgo, C. A., & Hausmann, R. (2009). The building blocks of economic complexity. Proceedings of the National Academy of Sciences, USA, 106(26), 10570–5.
6. Januškaitė, V., & Užienė, L. (2018). Intellectual capital as a factor of sustainable regional competitiveness. Sustainability, 10(12), 4848.
7. Lerro, A., & Schiuma, G. (2008). The impact of intellectual capital on regional development: an RCA application. International Journal of Innovation and Regional Development, 1(2), 147-165.
8. Roos, G. (2014, October). Regional economic renewal through structured intellectual capital development. Proceedings of the 11^th International Conference on Intellectual Capital, Knowledge Management and Organisational Learning: ICICKM2014. Academic Conferences Limited, 337-346.
9. Roos, G. (2019). Optimising resource deployment within the firm: overcoming theoretical problems with a practical application. Doctoral Dissertation, Adelaide: University of South Australia.
10. Roos, G. (2020). Some issues around moving towards a more sustainable economy. In B+I Strategy. (ed.), Estrategia. Vol 9 pp. 66-74 Bilbao. Spain.

Prof. Dr. Goran Roos
Dr. Yulia Farafonova
Guest Editors

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• economic complexity
• intellectual capital
• economic growth
• industry policy
• paradigm shift
• digital value creation
• environmentally sustainable value creation