The Global Economic Crisis of 2007-2009 : Its Relationship to Intellectual Capital Creation

The current global crisis (whose origins lie in the functionality of financial markets) has diverse repercussions for intellectual capital creation (i.e. human and structural assets as well as their components). The phenomenon is linked with limited resources being allocated to innovative projects in times of market turbulence as well as broader behavioral factors – e.g. a general flight to safety – severely affecting innovation-dependent areas. What has to be determined is the magnitude of this impact: identification of areas that have affected and formulation of causal and policy related observations with a view to controlling the negative fallout from the turmoil for intellectual capital creation and diffusion. Research compiled on the early evidence of cyclicality during the global economic crisis of 2007-2009 (measurable by the performance of leading indices for the US, Japanese and the UK equity markets) and trends in the creation of intellectual capital (expressed as educational attainment and filings for intellectual property registration in the USA, Japan and in the UK) indicates rigidness in the reporting of both categories of intellectual capital against a highly volatile pattern of equity valuations. The use of such classes of intellectual capital in forecasting economic shocks is thus disputable – for conceptual and practical reasons