Intellectual capital in service‐ and product‐oriented companies

As service companies are occupying an increasingly significant place as drivers of economic growth, there is a pressing need to understand their peculiarities in order to facilitate their effective management and governance. One important area in which this kind of understanding is lacking is intellectual capital (IC) and knowledge management. Although intellectual capital has become the key value driver for all types of organizations, there is a lack of systematic research on whether there are fundamental differences in the IC of service‐oriented versus product‐oriented companies. In an attempt to bridge this gap the paper aims to examine the main differences in IC stocks, creation, management and protection mechanisms between service‐oriented and product‐oriented companies.

The analysis is based on empirical evidence collected from 418 respondents representing HR and R&D functions in 335 Finnish companies.

The results demonstrate that service‐oriented companies possess more human capital and renewal capital, and focus more on IC creation than product‐oriented companies. In addition, IC protection is stronger in product‐oriented companies. As companies move towards a service orientation they need to change their approach to IC stocks and management, and in this acknowledging the differences between a service and a product orientation is the first step.

The results presented in this study shed new light on the differences between service‐oriented and product‐oriented companies in terms of the possession, management, creation and protection of intellectual capital.