Intellectual Capital Management in Local Public Utilities

The competitive advantage of companies is increasingly focused on Intellectual Capital (IC) and on its management. Factors such as skills, innovation, stakeholders’ relation, development and sharing of knowledge have become key success factors. These aspects are important for Local Public Utilities. These organizations produce goods and services operating in competitive markets in a utility function for the local community using technological and organizational infrastructure resources. In the past, in these organizations, IC was critical to reach objectives such as to satisfy citizen needs. Local Public Utilities focused their assets on the technical components of management including plant equipment, technical expertise, professionalism, and quality control and security systems. The introduction of the economic efficiency logic and competitiveness led to a rethinking of the IC role. The production of public services becomes competitive in the market according to logic of economic efficiency. The relationship with the community begins to be formalized in “service contracts”; new management structures are introduced and companies need to remunerate the capital invested. Consequently, companies must implement strategic and organizational changes and focus on intangible assets as knowledge, skills and operational mechanisms. In the new scenario IC becomes an important strategic tool both in the company and in the outside environment. Proper IC management can improve company value