Intellectual capital in a recession: evidence from UK SMEs

Purpose – The aim of this paper is to present the findings of a qualitative investigation of intellectual capital (IC) in the engineering industry in the UK within the context of a recession. Design/methodology/approach – Due to the fact that IC involves tacit knowledge which can often be “non‐verbal” or in some cases “non verbalable”, intuitive and unarticulated (Hedlund), qualitative methodology was chosen as it allows the flexibility to explore the IC in the target population in greater detail and to explore area/ideas of interest that may have developed during the data collecting process. Ten interviews were conducted on companies chosen from the Reed Business database’s classification of precision engineering. Data collection was via a semi‐structured interview, the results were coded into Nvivo and analysed. Findings – It was discovered that there is an interrelatedness of the components of IC, knowledge of IC management as a strategy in the engineering industry is low and the academic discourse on IC is in to transferring into practical implementation. Practical implications – There is greater need to address the practical implications and barriers to the implementation of IC management strategy within industry. Originality/value – The author having examined the data collected and the characteristics of the responding company and the dominant element of IC within each have coined the phrases Sector of Innovative Potential (SoIP), Sector of Collaborative Potential (SoCP) and Sector of Operating Efficiency (SoOE).