Yesterday, I described the Lisbon Strategy set forth in 2000 to accomplish the European Union’s strategic goal of leading the world in creating an information society based on a dynamic knowledge-based economy. To accomplish their goal, three objectives were formulated. Andriessen and Stam (2005) define these as:
· Preparing the transition to a competitive, dynamic and knowledge-based economy;
· Modernizing the European social model by investing in people and building an active welfare state;
· Sustaining the healthy economic outlook and favorable growth prospects by applying an appropriate macroeconomic policy mix.
To create a world economic power, the Lisbon Strategy relies on the formation of intellectual capital in order to become a competitive and dynamic knowledge-based economy.
Andriessen and Stam make these observations about the use of intellectual capital to drive macroeconomics and provide direction to social policies around economic development. “The concept of intellectual capital can be translated to the macro-economic level very easily, because the stories of our societies and of our nations are mirrors of ourselves and our organizations(Edvinsson, 2002). Debra Amidon was among the first to recognize the possibilities of applying intellectual capital on a macro-economic level, but the most rigorous work in this field until now is done by Nick Bontis. In his work he defines IC of Nations as the hidden values of individuals, enterprises, institutions, communities and regions that are the current and potential sources for wealth creation (Bontis, 2004).”
Andriessen and Stam define intellectual capital as intangible resources available to a country or region that give it a relative competitive advantage to produce future benefits. In their paper on intellectual capital, they use this definition to measure the intellectual wealth of a nation and its relative advantage among other countries. Such an approach supports the development of social policies on economic development. Additionally, these policies must take into account human capital, process capital, and market capital.
Human capital is knowledge, education and competencies of individuals in realizing national tasks and goals. Process capital represents the non-human storehouses of knowledge, which are embedded in its technological, information and communications systems. Market capital is the intellectual capital embedded in national intra-relationships. In order to successfully measure intellectual capital, assets, monetary investments, and the results of turning the intellectual capital into a commodity must be considered.
In sum, America should have and implement a strategy like the Lisbon Strategy that focuses on transforming itself into an information society with a knowledge-based economy. Such a strategy would require a redefinition and reinterpretation of macroeconomic models that should be based on America’s intellectual capital as the yardstick to measure our nation’s wealth. Current macroeconomic models are heavily embedded with assumptions based on capitalism and industrialism. Unfortunately, these models, and the social policies based on these models, continue to place greater emphasis on consumption rather than on production. For America to be successful in the 21st century as an information society, these macroeconomic models, their assumptions, and the social policies associated with them must be changed immediately.