Intellectual capital and innovation in construction organizations: a conceptual framework

Abstract

The role of knowledge resources in the success of the innovation process in organizations has been emphasized with some researchers noting the relevance of organizations’ intellectual capital (IC) as an underlying mechanism that impacts the capabilities of organizations for innovation activity. This necessitates the need to better understand such a relationship for effective innovation management practices in organizations. There is, however, a dearth of studies that explore the relationship between intellectual capital and its subtypes with the pursuit of explorative and exploitative innovation by organizations. Whilst some studies have linked different conceptualizations of innovation (e.g. incremental vs. radical) with intellectual capital, these studies have failed to explore how intellectual capital impacts organization’s ability to pursue explorative and or exploitative forms of innovation or how subtypes of intellectual capital differentially impact the explorative and or exploitative innovation capability of organizations. Attempts at connecting the two have come from anecdotal evidence from case studies. This paper draws on the theories of intellectual capital and ambidexterity to develop a conceptual framework of how intellectual capital across different levels of an organization and its subtypes individually or in combination relate to or facilitate the innovation capability of organizations. Innovation is conceptualized as the ability of organizations to pursue explorative and or exploitative forms of novel ideas, a departure from the traditional incremental vs radical typology of innovation. Improving the explorative and or exploitative innovation capability of organizations through its intellectual capital in the end will be dependent on gaining a deeper insight into the intellectual capital profiles of organizations as well as the mechanisms through which such profiles impact an organization’s explorative and or exploitative innovation capabilities.