Our Intellectual Capital in the Information Age

Moving from traditional, agriculture-based societies to industrial societies, we have reached the information society in tandem with rapid technological advances. We are moving towards a near future which we are still struggling to name—an age that some regard as a ‘conceptual age’ whilst others see as an ‘age of wisdom’ (hikmet). Every era brings forth its own values and those who embody them—values that stem from the era’s own dynamics and, in turn, form the very essence of that era. When we examine this transformation from the perspective of the workforce, the nature of the values and those who embody them in the information age becomes clearer.

If you like, let us first take a closer look at information and examine its evolution to gain a better understanding of where it is heading: This is described as a process beginning with data collection at the base of the information hierarchy; over time, the data is processed to become information, which is then analysed through cause-and-effect relationships to transform into knowledge and understanding. This builds upon functions centred entirely on the ‘left brain’¹ by incorporating the ‘right brain’²—the ability to think simultaneously, synthesise the whole through a context-focused approach, and, with the addition of intuitive functions, reach ‘wisdom’³—is described as the process of moving beyond purely ‘left-brain’ functions. If we define wisdom as the ultimate point at which knowledge is transformed and our minds can comprehend it, it will be important for all of us to pause at this point and ensure that our understanding of “wisdom” is accurate.

According to research by the philosopher and futurist Robert Anton Wilson, the volume of knowledge, which has been growing exponentially every year, has doubled annually since the year 2000. Based on this projection, from 2020 onwards, humanity will possess the capacity to produce more knowledge each year than was produced in the previous thousand years. This proves once again that the only constant in the world is change, and reminds us that to keep pace with the rapidly changing world, we must become creators and coders of knowledge, rather than mere consumers.

It is precisely at this point that a new concept—the definition of the product of knowledge and humanity—is entering the business world. Recent research shows that the ratio between companies’ book value and market value is diverging exponentially each year.

This new concept, which is beginning to emerge as a fundamental value criterion not only for companies but also for the futures of nations, is ‘Intellectual Capital’⁴ – or, to use another term, ‘Intangible Capital’. Although research points to three fundamental dimensions of intellectual capital and the many components that make up their sub-indicators, today intellectual capital is approached along two main axes: people and human resource management, and knowledge and knowledge management.

In our country, which aims to rank among the top seven in the world as part of its medium-term objectives, ensuring sustainable development across all sectors—from the economy and politics to science and technology, and from culture to social welfare— and the aim to increase export revenues to 500 billion dollars in less than 10 years once again highlights the importance of producing high-value-added, and innovative technological products, whilst once again highlighting the importance of producing such products. However, have our companies—which are expected to achieve these successes—actually reached the targeted level in terms of human and knowledge management?

A chain reaction of problems, beginning with the mismatch between the right talent and the right job, continues with an inability to clearly define what is expected of employees and issues regarding motivation, and unfortunately culminates in the failure to ensure that individuals’ development reaches the desired level. As for knowledge management, even in developed societies, the proportion of codified knowledge within the total body of knowledge stands at around 30 per cent. The fact that knowledge remains uncodified hinders its continuity and flow; as it cannot contribute to ‘collective knowledge’⁵, it remains not as the company’s intellectual capital but as the individual memory of employees, and can vanish through the door at any unexpected moment. At this point, “Human Resources Departments” – from which we expect to enhance the intellectual capital of companies and, indirectly, of societies by increasing organisational capacity for a sustainable competitive advantage – have a far greater role to play than ever before.

1. Left Brain: Represents creative intelligence. It processes information as a whole and through imagery. It uses imagery and symbols; it responds to pictures, shapes and colours. Beyond verbal expressions, it responds to music, body language and touch. It is intuitive, following instincts and feelings. It forms emotional, rather than abstract, connections with objects.

2. Right Brain: Represents Logical Intelligence. It is the centre of speech and language. It thinks analytically (step by step). It is logical and systematic. It processes information sequentially and linearly. It is detail-oriented. It excels at numerical operations. It utilises cause-and-effect relationships.

3. Wisdom: The capacity to assimilate and apply these qualities—including the acquisition of knowledge, insight, experience, common sense and intuitive understanding. The application of knowledge through common sense, profound insight and reasoned logic.

4. Intellectual Capital (Intangible Capital): The totality of intangible assets that distinguish a firm from others, such as its workforce, customer relationships, organisational structure and corporate culture.

5. Collective Knowledge: Knowledge that has been documented and incorporated into the company’s total intellectual capital, and which is sustainable and portable.

Pınar Ersoy Özdoğru