Technologically advanced and custom-made service industries: how to measure Intellectual Capital?

Purpose – The purpose of this paper is to address Intellectual Capital (IC) evaluation methods in service industries. As suggested by literature some services may be as different from others as they are from products. Thus there is a great need for studies clarifying the distinctions between different service-oriented firms with respect to the role and the measurement of IC and, in particular, of human capital, which is generally considered as the most significant element of IC. Design/methodology/approach – A case study approach has been chosen to examine the intellectual capital valuation process suggested by the authors. Data have been gathered by in-depth interviews to managers and group discussions. Originality/value –In our research we decide to focus on high-tech custom-made service industries. Our findings suggest that methods to measuring human capital should consider, as a key factor, the firm’s project management organisation. In fact, the temporary nature of projects stands in contrast to operations which are repetitive to produce products or services. In practice, the management of these two systems is often found to be quite different, and as such requires the development of distinct technical skills. Furthermore in project management organization the combination of different knowledge into useful system is required as well as close interaction between the supplier and the customer in co-producing the service. Practical implications – This paper evaluate various labour accounting methods and human capital measurement methods that are suggested by literature and recommends the development of a specific valuation process for technologically advanced custom-made service industries.