Post on 16-Jan-2016
description
KM 101Dr. Nick Bontis
Associate Professor of Strategic Management, McMaster U.Director, Institute for Intellectual Capital Research
Associate Editor, Journal of Intellectual CapitalChief Knowledge Officer, Knexa Solutions
www.NickBontis.com nick@bontis.com
Seminar Agenda• Phase 1: Knowledge Era
– understanding the context of the information age• Phase 2: IC Multi Perspectives
– What is IC? Depends on who you ask.• Phase 3: IC Models
– levels of analysis, types of knowledge, stocks & flows• Phase 4: SLAM Measures
– alignment of stocks and flows with performance• Phase 5: Causal Mapping
– Structural equation methodology and measures• Phase 6: National IC Index
– Country level measurement and modeling• Phase 7: Software Demonstration
– TangoNet and Tribute
MindLand
Machine
Knowledge Era
Industrial Era
Entering A New Era ?
Agriculture Era
Tobin’s q
GroupWare
Internet
AccountingMetrics
Tech
Internet users:30 million - 1999
817 million - 2005 WTO
In 1997 home PCs passed TVs in units sold
Retail Week
Canadian Internet Usage:1995 4%, 1998 25%, 2005 75%
Nielsen
Internet trafficdoubling every
70 daysDept. of Commerce
KM Research Highlights
• IDC reports FORTUNE 500 wasted $12 billion duplicating work
• Ford reports $914 million cost savings due to KM from 1997 - 2000• Chevron saves $650 million since 1991 due to KM• Texas Instruments saves $1 billion cumulatively since
KM program launched in mid 1990s
• Gartner Group reports– 90% of FORTUNE 500 working on KM– 33% of FORTUNE 1000 had begun KM programs by 1999– will rise to over 50% by 2003
• World Economic Forum– 95% of CEOs feel that KM is critical to success
Myths of Measuring KM
1. The reality is that when you finally do it, you are never satisfied
2. The few who are doing it are probably not doing it well
3. Those who say they are doing it are probably lying4. No one is sure what it is, but they hear that it is
great5. Everyone thinks everyone else is doing it
KM Research Highlights
• Stats Canada (348 organizations surveyed)– 93% have KM initiatives, 25% dedicated budget– Why have KM?
• Competitive advantage, human capital, intellectual capital retention
• Fortune 500– 80% have KM initiative(s) in place, 25% have CKOs
53% have KM staff, all #s expected to grow – 6% have KM initiatives company-wide, 60% < 5 years
KM is owned 32% Sr.Mgt., 25% HR, 16% IT
• Government - all levels• Institute for Intellectual Capital Research
– CKOs from 40% HR, 40% IT, plus other (hired within)
Multi - Perspectives
Accounting
Training &Development
Economics
HumanResources
OrganizationalBehaviour
Strategy
Finance
TechnologicalSystems
Marketing
Sales
Aoccdrnig to rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a total mses and you can sitll raed it wouthit a porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.
Volunteer for a Reading test
Volunteer for a Reading test
Where are we Where are we going?going?
• Lester Thurow - MIT“The dominant competitive weapon of the 21st century will be the
education and skills of the workforce.”• Jac Fitz-enz - Saratoga Institute
“The contingent workforce will become the dominant model.”• President Clinton - U.S. White House
“By having the chance to work while you learn ... You embody the growing unity between experience and education.”
• Steve Maharey - NZ Labour Spokesperson on Education“Maori and Pacific Island peoples in particular remain under
represented in tertiary education.”
Importance of Importance of phenomenonphenomenon
Choo and Bontis (2002), Bontis (2002) Fitz-enz (2000) Max Boisot (1998) & Choo (1998)
Knowledge Assets, Knowing in Organizations Sveiby (1997) & Stewart (1997) & Roos (1997)
Organizational Wealth Nonaka and Takeuchi (1995)
The Knowledge Creating Company Drucker (1993)
arrival of the “knowledge society” Toffler (1990), Handy (1989)
ultimate resource, intellectual assets 3 or 4 times BV
Tracing KM’s History
Egyptians, Greeks, Monks, Knights Taylor (1911)
Evidence of codification of knowledge Simon (1945)
Cognitive capacity “bounded rationality” Schumpeter (1952)
Innovation from new combinations of knowledge
Penrose (1959) Organization is a knowledge repository
IASC, CICA, FASB & SEC … Help!
Cash
Receivables
Fixed Assets
IntellectualCapital
Liabilities
Shareholder’sEquity
Market ValueAdded
Visible (Explicit) Accounting
Invisible (Implicit) Accounting
Distinguishing the Terms
Stock Stock Flow
Behaviour 1 Behaviour 2 Behaviour 3
IntellectualCapital
KnowledgeManagement
IntellectualCapital
Organizational Learning System 123
Devil’s Advocate
KnowledgeManagement
The Danger of KM
Achievement Driven
Paternalistic
Balance Organizational Slack
OrganizationalPerformance
Level of Analysis: Individual
recruitment building competencies assessing weaknesses retention compensation satisfaction
Level of Analysis: Group
• concerted team action
• collectively aligned mind sets
• synergy
• cohesion
• shared perception of thebusiness environment
Level of Analysis: Organization
StrategyContinuous Improvement
Systems
Culture
Leadership
Structure
Trust
Technology
IC Conceptualization
2nd order multi-dimensional 3 sub-domains drivers
trust, culture leadership
HumanCapital
StructuralCapital
RelationalCapital
Customer Capital
Organizational Capital
Innovation Capital
Process Capital
Structural Capital
Human Capital
Intellectual Capital
Financial Capital
Market Value
Conceptual Model - Firm
House Metaphor
Financial Wealth
Human Capital
Marke
tC
apita
l
Renewal Capital
Pro
cess
Cap
ital
Past
Present
Future
Financial Wealth
Human Capital
Marke
tC
apita
l
Renewal Capital
Pro
cess
Cap
ital
Past
Present
Future
IC Perceptual Model
Nonaka (SECI Model)
Tacit
Explicit
Socialization
Internalization
Externalizaton
Combination
Tacit Explicit
From
To
Metaphors and Analogies
• stocks and flows– production system– capacity utilization, bottlenecks, throughput– ties-in stocks of knowledge and flow of learning
• bathtub analogy– tap in and leak (knowledge flow)– water level (intellectual capital)– the whole water system (organizational learning)
We need an integrative We need an integrative framework!framework!
Strategic Learning Assessment Map
H R S
H R S
H R S
H R S
Individual Group Organization Cross-organization
Individual
Group
Organization
Cross-organization
Flow Output
Flow Input
Feed-forward
Feed-back
Legend: H
(human), R
(relation
al), S (structural) =
IC)
Measure, Test and Evaluate
• multi-method approach (quantitative and qualitative) – IICR Knowledge AuditIICR Knowledge Audit: survey design (Likert-type)
• objective proxies (www.Saratoga-Institute.comwww.Saratoga-Institute.com)– benchmarking of HR metrics (turnover and training & dev.turnover and training & dev.)– e-mail direction (IICR e-Flow AuditIICR e-Flow Audit)– knowledge sweeping (dynamic corporate yellow pages)
• Some tools to check out ...Some tools to check out ...– Knexa.com, BrassRing.com, OpenText.com– Monster.com, eLance.com, Talent websites
• Tango SimulationTango Simulation– www.TangoNow.net
• IC DisclosureIC Disclosure– www.Celemi.se– www.Skandia.se– www.Carlbro.dk
KM Continuum
IICR KM Diagnostic
Tribute Technology
KM Seminars
KM Diagnostic Audit
ManagerialLeadership
ValueAlignment
Retention of Key People
Human CapitalDepletion
BusinessPerformance
EmployeeSatisfaction
EmployeeCommitment
EmployeeMotivation
Training &Development
HumanCapital
RelationalCapital
Human CapitalEffectiveness
StructuralCapital
ProcessExecution
KnowledgeIntegration
KnowledgeGeneration
KnowledgeSharing
0.751
0.506
0.475
0.530 0.326 0.360
0.358
0.734
0.456 0.429
0.430
0.285 - 0.233
- 0.372
- 0.337
0.327
0.439
0.543
0.491
0.3940.262
0.307
0.442
R2 = 28.5%
R2 = 28.5%
R2 = 68.2%
R2 = 44.1%
Age
Obesity
HeartAttack
Correlation between Age and Risk of Heart Attack+ 0.36 (p < 0.01)
Correlation vs Path Analysis
Correlation between Obesity and Risk of Heart Attack+ 0.32 (p < 0.01)
+ 0.36
+ 0.32
Age
Obesity
HeartAttack
Path between Age and Obesity+ 0.26 (p < 0.01)
Correlation vs Path Analysis
Path between Obesity and Risk of Heart Attack+ 0.43 (p < 0.01)
X+ 0.26
+ 0.43
ManagerialLeadership
ValueAlignment
EmployeeSatisfaction
EmployeeCommitment
EmployeeMotivation
TrainingHumanCapital
RelationalCapital
Human CapitalDepletion
Retention of Key People
BusinessPerformance
Human CapitalEffectiveness
StructuralCapital
ProcessExecution
KnowledgeIntegration
KnowledgeGeneration
KnowledgeSharing
0.751
0.506
0.475
0.530 0.326 0.360
0.358
0.734
0.456 0.429
0.430
0.285 - 0.233
- 0.372
- 0.337
0.327
0.439
0.543
0.491
0.3940.262
0.307
0.442
R2 = 28.5%
R2 = 28.5%
R2 = 68.2%
R2 = 44.1%
Outcome Constructs
Participating Participating OrganizationsOrganizations
ABN AMRO North America Inc. Allstate Insurance CompanyAMP Australia AMP UK Andersen Consulting Aon AXA Client Solutions Blue Cross Blue Shield of Florida Blue Cross Blue Shield of Illinois / Texas Blue Cross Blue Shield of North Carolina CNA Commercial Insurance EquitaxFarmers Insurance Group
Hartford Financial ServicesHewitt Associates, LLCIntermountain Health Care International Monetary Fund Merrill LynchNational City Corp. Northwestern Mutual LifePenn National InsurancePNC BankSavings Bank of UticaUnited Health Group Zurich U.S.
Quantitative Quantitative Metric ModelMetric Model
Human CapitalEffectiveness
Human CapitalValuation
Human CapitalDepletion
Human CapitalInvestment
+
+
_
Quantitative Quantitative Metric ModelMetric Model
Human CapitalEffectiveness
Human CapitalValuation
Human CapitalDepletion
Human CapitalInvestment
+
+
_
• Revenue Factor• Income Factor
HC Effectiveness - HC Effectiveness - Income FactorIncome Factor
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Income Factor $36,514 $42,037 $64,612 $18,107 $61,373 $78,379 $64,112
HCV Sample
Banks Insurance -
All Insurance -
H&L Insurance -
PCP Non-Bank Financials
All Industries
Quantitative Quantitative Metric ModelMetric Model
Human CapitalEffectiveness
Human CapitalValuation
Human CapitalDepletion
Human CapitalInvestment
+
+
_
• Revenue Factor• Income Factor
• Compensation Expense Factor• Compensation Factor
HC Valuation - HC Valuation - Compensation Compensation
FactorFactor
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Comp Fac $54,024 $32,509 $41,046 $37,588 $40,900 $46,531 $44,445
HCV Sample Banks Insurance -
All Insurance -
H&L Insurance -
PCP Non-Bank Financials
All Industries
Quantitative Quantitative Metric ModelMetric Model
Human CapitalEffectiveness
Human CapitalValuation
Human CapitalDepletion
Human CapitalInvestment
+
+
_
• Revenue Factor• Income Factor
• Compensation Expense Factor• Compensation Factor
• Development Rate• Training Investment
HC Investment - HC Investment - Development RateDevelopment Rate
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Develop Rate 82.2% 56.9% 74.2% 87.9% 61.1% 59.1% 66.3%
HCV Sample
Banks Insurance -
All Insurance -
H&L Insurance -
PCP Non-Bank Financials
All Industries
Quantitative Quantitative Metric ModelMetric Model
Human CapitalEffectiveness
Human CapitalValuation
Human CapitalDepletion
Human CapitalInvestment
+
+
_
• Revenue Factor• Income Factor
• Compensation Expense Factor• Compensation Factor
• Development Rate• Training Investment
• Voluntary Turnover• Involuntary Turnover
HC Depletion - HC Depletion - Voluntary TurnoverVoluntary Turnover
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Voluntary 13.1% 18.8% 12.6% 12.6% 11.9% 18.6% 14.7%
HCV Sample
Banks Insurance -
All Insurance -
H&L Insurance -
PCP Non-Bank Financials
All Industries
Areas of Areas of ConcernConcern
2
5
5
6
7
9
10
11
12
13
17
23
29
30
31
0 5 10 15 20 25 30 35
Relational Capital
Structural Capital
Know ledge Generation
Education
Value Alignment
Motivation
Know ledge Sharing
Human Capital
Know ledge Integration
Employee Satisfaction
Employee Commitment
Process Execution
Retention of Key People
Business Performance
Management Leadership
Human CapitalDepletion
BusinessPerformance
EmployeeSatisfaction
EmployeeCommitment
EmployeeMotivation
TrainingHumanCapital
RelationalCapital
Human CapitalEffectiveness
StructuralCapital
ProcessExecution
KnowledgeIntegration
KnowledgeGeneration
0.475
0.530 0.326 0.360
0.358
0.734
0.456 0.429
0.430
ManagerialLeadership
ValueAlignment
Retention of Key People
KnowledgeSharing
0.751
0.506
0.285 - 0.233
- 0.372
- 0.337
0.327
0.439
0.543
0.491
0.3940.262
0.307
0.442
R2 = 28.5%
R2 = 28.5%
R2 = 68.2%
R2 = 44.1%
Research Research Implication IImplication I
ManagerialLeadership
ValueAlignment
Retention of Key People
Human CapitalDepletion
BusinessPerformance
EmployeeSatisfaction
EmployeeCommitment
EmployeeMotivation
Training
ProcessExecution
KnowledgeIntegration
KnowledgeGeneration
KnowledgeSharing
0.751
0.506
0.475
0.530
0.358
0.734
0.456 0.429
0.430
0.285 - 0.233
- 0.372
- 0.337
0.327
0.439
0.543
0.491
0.3940.262
0.442
R2 = 28.5%
HumanCapital
RelationalCapital
Human CapitalEffectiveness
StructuralCapital
0.326 0.360
0.307 R2 = 28.5%
R2 = 68.2%
R2 = 44.1%
Research Research Implication IIImplication II
ManagerialLeadership
ValueAlignment
Retention of Key People
Human CapitalDepletion
TrainingHumanCapital
RelationalCapital
Human CapitalEffectiveness
StructuralCapital
ProcessExecution
KnowledgeIntegration
KnowledgeGeneration
0.751
0.506
0.475
0.530 0.326 0.360
0.285 - 0.233
- 0.372
- 0.337
0.3270.543
0.3940.262
0.307
0.442
R2 = 28.5%
R2 = 28.5%
R2 = 68.2%
0.430Knowledge
Sharing
BusinessPerformance
EmployeeSatisfaction
EmployeeCommitment
EmployeeMotivation
0.358
0.734
0.456 0.4290.439
0.491
R2 = 44.1%
Research Research Implication IIIImplication III
ManagerialLeadership
ValueAlignment
Retention of Key People
EmployeeSatisfaction
EmployeeCommitment
EmployeeMotivation
TrainingHumanCapital
RelationalCapital
Human CapitalEffectiveness
StructuralCapital
0.751
0.506
0.475
0.530 0.326 0.360
0.358
0.734
0.456 0.429
0.430
0.285
- 0.372
- 0.337
0.439
0.543
0.491
0.307
0.442
R2 = 28.5%
R2 = 68.2%
BusinessPerformance
Human CapitalDepletion
ProcessExecution
KnowledgeIntegration
KnowledgeGeneration
KnowledgeSharing
- 0.233
0.327
0.3940.262
R2 = 28.5%
R2 = 44.1%
Research Research Implication IVImplication IV
ManagerialLeadership
ValueAlignment
Retention of Key People
EmployeeSatisfaction
EmployeeCommitment
EmployeeMotivation
TrainingHumanCapital
RelationalCapital
StructuralCapital
ProcessExecution
KnowledgeIntegration
KnowledgeGeneration
KnowledgeSharing
0.751
0.506
0.475
0.530 0.326 0.360
0.358
0.734
0.456 0.429
0.430
0.285 - 0.233
0.327
0.439
0.543
0.491
0.3940.262
0.307
0.442
R2 = 68.2%
Human CapitalDepletion
BusinessPerformance
Human CapitalEffectiveness
- 0.372
- 0.337
R2 = 28.5%
R2 = 28.5%
R2 = 44.1%
Research Research Implication VImplication V
KRA Health KRA Health CanadaCanada
ManagementLeadership
ValueAlignment
Retention of Key People
Turnover
PerformanceEmployeeSatisfaction
EmployeeCommitment
EmployeeMotivation
FeedbackLearning
HumanCapital
RelationalCapital
StructuralCapital
ProcessExecution
KnowledgeIntegrationKnowledge
Generation
KnowledgeSharing
0.598
0.326
0.424
0.135
0.235
-0.161
0.139
0.182
0.380
0.442
0.328
0.809
0.295
- 0.352
0.282
-0.266
0.454
0.522
0.257
0.376
0.196
R2 = 20.0%
R2 = 61.1%
R2 = 54.1%
Training &Development
0.730
0.603
0.570
0.567
0.3560.3980.651
0.446 - 0.1570.167
Elements of KM Elements of KM ProgramsPrograms
KMKM Applications Applications MatrixMatrix
Individual Group Organization Extended
Arsenal of KM Arsenal of KM ToolsTools
Simulate Scenario planning
Expert systemsVirtual organization
KM Laboratories
Disseminate Distributed e-learning
Communities of practiceKnowledge portals
IC reporting / disclosure
Communicate Apprenticeships
Job rotationOrganizational slack
Ba design/implementation
MapWorkflow analysisKnowledge maps
Statistical flow timing eFlow Audits
Categorize Taxonomy development
Intranet groupwareText mining
Organizational libraries
ContextualizeExpertise locators
Intranet yellow pagesDocument managementVideo teleconferencing
HypothesizeMathematical models
Neural networksKnowledge discovery
Longitudinal forecasting
GatherData warehousing
Information navigationCompetitive IntelligenceEnvironmental scanning
DiagnoseAwareness / storytelling
KM audit / survey Values assessment
Customer focus groups
TACIT EXPLICIT EMBEDDED
Background Background InformationInformation
• United Nations– Nationalize IC concept– Leverage for public policy– Isolate a target area for study
• McMaster University– World Congress on IC– 1st MBA with KM minor– Develop methodology– Research and collect metrics– Design a structural model
Arab RegionArab Region
AlgeriaBahrain
ComorosDjiboutiEgyptIraq
SomaliaSudanSyria
TunisiaUAE
Yemen
JordanKuwait
Lebanon Libya
Mauritania
MoroccoOman
PalestineQatar
Saudi Arabia
Customer Capital
Organizational Capital
Innovation Capital
Process Capital
Structural Capital
Human Capital
Intellectual Capital
Financial Capital
Market Value
Conceptual Model - Firm
Market Capital
Organizational Capital
Renewal Capital
Process Capital
Structural Capital
Human Capital
Intellectual Capital
Financial Wealth
National Wealth
Conceptual Conceptual Model - NationModel - Nation
House House MetaphorMetaphor
Financial Wealth
Human Capital
Marke
tC
apita
l
Renewal Capital
Pro
cess
Cap
ital
Past
Present
Future
Financial Wealth
Human Capital
Marke
tC
apita
l
Renewal Capital
Pro
cess
Cap
ital
Past
Present
Future
Descriptive Descriptive StatisticsStatistics
Total Projected Gender Health Poverty Gender
Total Total Growth Age 0-14 Poplution GEM HDI HPI-1 GDI
(millions) (millions) (%) (%) (millions) (index) (index) (index) (index)2000 1950 1950-2000 2000 2015 2001 2001 2001 2001
DES01 DES02 DES03 DES04 DES05 DES06 DES07 DES08 DES09Algeria 30.31 8.75 246.4 34.8 37.85 0.693 23.5 0.673Bahrain 0.64 0.11 481.8 28.2 0.78 0.824 0.814Comoros 0.71 0.17 310.4 43.0 0.98 0.510 29.9 0.503Djibouti 0.63 0.06 916.1 43.2 0.85 0.447 34.7Egypt 67.89 21.83 210.9 35.4 84.51 0.258 0.635 31.7 0.620Iraq 22.95 5.16 344.9 41.6 32.53Jordan 4.91 0.47 940.3 40.0 6.97 0.714 8.5 0.698Kuwait 1.91 0.15 1,156.6 31.3 2.36 0.818 0.815Lebanon 3.50 1.44 142.6 31.1 4.31 0.758 10.2 0.741Libya 5.29 1.03 414.1 33.9 6.84 0.770 16.7 0.748Mauritania 2.66 0.83 222.4 44.1 3.84 0.437 47.2 0.428Morocco 29.88 8.95 233.7 34.7 37.90 0.596 36.4 0.579Oman 2.54 0.46 457.0 44.1 3.92 0.747 32.2 0.715PalestineDjibouti 0.56 0.03 2,140.0 26.7 0.68 0.801 0.788Saudi Arabia 20.35 3.20 535.7 42.9 31.06 0.754 17 0.719Somalia 8.78 2.26 287.8 48.0 13.66Sudan 31.10 9.19 238.4 40.1 41.36 0.439 34.8 0.413Syria 16.19 3.50 363.2 40.8 21.95 0.700 19.8 0.677Tunisia 9.46 3.53 168.0 29.7 11.52 0.714 0.700UAE 2.61 0.07 3,628.6 26.0 3.09 0.809 0.798Yemen 18.35 4.32 325.2 50.1 33.16 0.470 42.5
Arab States 281.22 75.51 272.4 35.9 380.12 0.258 0.665 27.5 0.672
SOURCE UN, 2001 UN, 2001 Calculated UNESCO UN, 2001 HDR, 2001 HDR, 2001 HDR, 2001 HDR, 2001
Population World Bank Indices
Financial Financial CapitalCapital
Trade
Per Capita Trade as % Barriers to Market ListedPer Capita Growth of Goods GDP Entry Cap. Companies
($PPP) (%) (%) ($ millions)1999 90-99 1999 2001 2000 2000FC01 FC02 FC03 FC04 FC05 FC06
Algeria 5,063 -0.4 69.90 4.0Bahrain 13,688 0.8 3.0Comoros 1,429 -3.1Djibouti 2,377 -5.1Egypt 3,420 2.4 42.10 5.0 28,741 1,076Iraq 5.0Jordan 3,955 0.4 171.60 4.0 4,943 163Kuwait 17,289 132.70 2.0 18,814 76Lebanon 4,705 3.0Libya 7,570 5.0Mauritania 1,609 1.3 138.20Morocco 3,419 0.4 108.20 4.0 10,899 53Oman 13,356 2.8 126.10 2.0 3,463 131PalestineQatar 18,789 3.0Saudi Arabia 10,815 -2.2 109.60 4.0 67,171 75SomaliaSudan 664Syria 4,454 0.8 108.50 5.0Tunisia 5,957 1.9 126.70 5.0 2,828 44UAE 18,162 -1.6 159.30 2.0 28,211 53Yemen 806 -0.4 116.20 4.0
Arab States 7,238 -0.14 117.43 3.75 165,070 1,671
SOURCE HDR, 2001 HDR, 2001 WDI 2001
Gross Domestic Product Stock Markets
Human Capital Human Capital (1 of 4)(1 of 4)
Pre- Pre- Primary Primary Tertiary Primary Primary Secondary Tertiary
1980 2000 LYA LYA 1998 LYA LYA LYA LYAHC01 HC02 HC03 HC04 HC05 HC06 HC07 HC08 HC09
Algeria 40.10 63.30 15,426 13 1,333 170,956 145,160 19,910Bahrain 71.40 87.60 90 2 655Comoros 48.30 56.20 327 600 1,508 591Djibouti 31.40 51.40 2 72 1 1,096 403Egypt 39.30 55.30 2,367 18 12,050 310,116 259,618Iraq 570 8,145 12 4,841 145,455 52,393 8,818Jordan 68.40 89.80 932 2,623 17 3,346 45,367 5,275Kuwait 67.60 82.30 215 286 1 3,525 10,798 20,867 1,691Lebanon 72.40 86.10 1,938 2,160 10 10,444Libya 52.90 79.80 78 11 1,051Mauritania 29.00 39.90 36 2,392 1 108 6,225 1,865 270Morocco 28.60 48.90 33,617 5,806 14 39,469 114,406 80,817Oman 36.80 71.90 5 411 1 347 12,052 12,251 1,307Palestine 86.10 1,118 9 15,903 7,634 2,443Qatar 69.80 81.30 64 174 1 321 864 3,946 643Saudi Arabia 52.30 77.00 893 11,506 8 7,703 175,458 115,907 15,868Somalia 16 1,224 1 133 10,338 2,149 324Sudan 33.00 57.10 7,541 11,158 26 8,897 102,987 14,743 2,043Syria 53.30 74.40 1,096 10,783 4 4,427 114,689 2,182 4,733Tunisia 46.80 70.80 1,115 4,417 6 59,708 36,528 6,641UAE 65.60 76.50 4 3,110 16,148 9,832Yemen 20.20 46.20 62 15 680 90,478 13,787
Arab States 48.80 69.10 50,637 78,028 175 91,941 1,404,552 635,513 81,065
SOURCE UNESCO UNESCO UNESCO HES, 1998 UNESCO UNESCO UNESCO UNESCO
Literacy Rate Number of StaffNumber of Schools
Human Capital Human Capital (2 of 4)(2 of 4)
Labour
Total Required Certified Pre- Force Qual. to Teach Primary Primary Secondary Tertiary
(millions) (%) (%)1999 LYA LYA LYA LYA LYA LYAHC10 HC11 HC12 HC13 HC14 HC15 HC16
Algeria 0.23 92.96 92.96 33,503 4,674,947 2,480,168 347,410Bahrain 65.00 100.00 12,308 72,876 49,897 7,676Comoros 17,778 78,527 21,192 348Djibouti 24.00 100.00 66.10 247 36,896 11,367 161Egypt 6.00 99.75 85.50 289,995 7,499,303 4,835,938 850,051Iraq 1.00 21.10 78.90 85,024 2,903,923 1,037,482 169,665Jordan 1.00 46.70 100.00 69,425 1,121,866 115,307 112,959Kuwait 1.00 100.00 100.00 54,572 142,308 222,079 29,509Lebanon 2.00 56.00 164,397 382,309 292,002 81,588Libya 1.00 97.40 15,028 1,357,040 189,202 72,899Mauritania 11.00 94.70 800 312,671 49,221 8,496Morocco 1.00 91.00 91.00 829,384 3,160,907 1,315,342 311,743Oman 99.00 6,989 313,516 215,673 16,032Palestine 0.25 97.10 45.40 656,353 5,469 49,599Qatar 7.00 33.20 68.50 7,018 53,631 37,924 8,475Saudi Arabia 100.00 100.00 85,484 2,256,185 1,500,072 273,992Somalia 12.00 1,558 196,496 39,753 2,040Sudan 5.00 61.10 59.70 343,767 3,000,048 379,162 59,824Syria 4.00 89.92 10.80 98,151 2,690,205 865,042 167,186Tunisia 1.00 93.30 99.20 68,108 140,479 833,372 121,787UAE 5.00 78.90 55,624 259,509 121,736 16,213Yemen HC 74.30 90.90 11,999 2,699,788 286,405 65,675
Arab States 97.00 79.57 79.26 2,251,159 34,009,783 14,903,805 2,773,328
SOURCE
Primary Teachers Number of Pupils
Human Capital Human Capital (3 of 4)(3 of 4)
Pre- Pre- Population Cumulative TotalPrimary Primary Tertiary Primary Primary w/ Tertiary Graduates Tertiary Grad.
(%) (/100k people) (/100k people)LYA LYA LYA LYA LYA 1980-1995 1996HC17 HC18 HC19 HC20 HC21 HC22 HC23 HC24
Algeria 303 26,724 11 1,129 184Bahrain 137 3,838 10.3 2,090 272Comoros 240 5Djibouti 124 512 161 15 678 91Egypt ` 47,225 5 4.6 2,435 213Iraq 149 357 14,139 8 18 4.1 1,553 274Jordan 74 428 6,645 4 17 3,069 657Kuwait 254 498 29,509 16 38 16.4 2,833 571Lebanon 85 177 8,159 4,738 486Libya 193 6,627 13 2.7 2,105 209Mauritania 22 131 8,496 3 3 1.3 743 107Morocco 25 544 22,267 1 20 1,147 128Oman 1,398 763 16,032 69 29 414 101Palestine 587 5,511 14 2,126 345Qatar 110 308 8,475 5 5 13.3 1,715 244Saudi Arabia 96 196 34,249 9 15 944 163Somalia 97 161 2,040 8 8 169 9Sudan 46 269 2,301 1 9 0.8 530 42Syria 90 249 41,797 4 11 1,391 200Tunisia 61 32 20,298 14 2.8 1,320 209UAE 4,053 640 120Yemen 194 4,378 11 337 74
Arab States 185 338 14,901 11 14 6.3 1,529 224
SOURCE Calculated Calculated Calculated Calculated Calculated UNESCO HES, 1998 HES, 1998
Staff to Schools Higher EducationPupils to Schools
Human Capital Human Capital (4 of 4)(4 of 4)
ArabicMale Female Male Female Language Math(%) (%) (%) (%) (%) (%)
1994-1999 1994-1999 1997 1997 LYA LYAHC25 HC26 HC27 HC28 HC29 HC30
Algeria 82.0 79.0 96.0 94.0Bahrain 98.4 99.1ComorosDjiboutiEgypt 88.0 85.0Iraq 99.0 98.0 82.0 87.0Jordan 63.0 63.0 97.5 97.7 63.1 26.7Kuwait 63.0 62.0 95.2 98.1 57.0 43.5Lebanon 71.4 60.6LibyaMauritania 30.0 30.0 65.4 66.1 36.8 26.0Morocco 55.0 51.0 73.1 76.6Oman 75.0 75.0 95.6 94.5 57.3 54.3Palestine 98.0 98.3 32.0 16.7Qatar 82.3 92.5 98.5 98.8Saudi Arabia 87.0 75.0 97.0 95.7SomaliaSudan 46.0 41.0 74.6 77.9 76.3 27.7Syria 91.0 88.0 93.2 90.0 82.5 84.5Tunisia 87.0 85.0 90.0 92.0 71.3 28.8UAE 96.0 98.0 94.7 96.1 53.5 51.5Yemen 83.0 51.0 77.2 69.2
Arab States 74.6 70.1 88.1 89.1 63.6 47.2
SOURCE WDI, 2001 WDI, 2001
Pupils with Basic SkillsGrade 5 CohortGrade 1 Net Intake
Process Capital Process Capital (1 of 2)(1 of 2)
Total PC-1 in Waiting Waiting Cost of Cost of Int. Intn'l Internet Securelargest city List Time Local Call Call (3min) Mins/User PC's Hosts Users Servers
(/1000 p.) (/1000 p.) (000's) (years) ($) ($) (minutes) (/1000 p.) (/10K p.) ('000's)1999 1999 1999 1999 1999 1999 1999 2000 1999 2000PC01 PC02 PC03 PC04 PC05 PC06 PC07 PC08 PC09 PC10 PC11
Algeria 52 55 640.0 6.0 0.02 8.278 90 5.8 0.01 20BahrainComorosDjiboutiEgypt 75 151 1290.0 2.3 0.03 7.849 32 12.0 0.85 200 12Iraq 30 75 19 0.00Jordan 87 232 29.7 0.4 0.03 258 13.9 1.45 12 2Kuwait 240 47 0.0 0.0 0.02 8.011 394 121.3 23.15 100 3Lebanon 201 96 0.07 8.372 124 46.4 11.89 200 16Libya 101 94 80.0 1.4 0.03 78 0.01 7Mauritania 6 17 47.8 >10.0 0.09 489 27.2 0.20 13Morocco 53 115 17.9 0.2 0.08 8.353 40 10.8 0.33 50 4Oman 90 165 3.9 0.5 0.07 463 26.4 3.00 50 1PalestineQatarSaudi Arabia 129 253 927.0 3.1 0.02 7.634 305 57.4 1.53 300 9SomaliaSudan 9 45 355.0 7.0 0.02 99 2.9 0.00 5Syria 99 140 2820.0 >10.0 0.01 76 14.3 0.00 20 1Tunisia 90 90 83.7 0.9 0.03 7.612 165 15.3 0.10 30 4UAE 332 373 0.6 0.0 0.02 8.627 988 102.1 92.13 400 24Yemen 17 77 131.0 4.5 0.02 109 107.0 0.06 10
Arab States 87 127 6314.0 1.4 0.03 8.092 124 25.4 0.67 1153 72
SOURCE WDI, 2001 WDI, 2001 WDI, 2001 WDI, 2001 WDI, 2001 WDI, 2001 WDI, 2001 WDI, 2001 WDI, 2001 WDI, 2001 WDI, 2001
Computer and InternetTelephone Mainlines
Process Capital Process Capital (2 of 2)(2 of 2)
Mobile Newspaper
Phones Radio TV TV Cable FaxReceivers Sets Subscribers Machines Circulation
(/ 1000 p.) (/1000 p.) (/1000 p.) (/1000 p.) (/1000 p.) (/1000 p.)1999 1999 1999 1999 1999 LYAPC12 PC13 PC14 PC15 PC16 PC17
Algeria 2 242 105 0.2 38Bahrain 580 472 117Comoros 141 1.9Djibouti 84 45Egypt 8 317 119 0.5 38Iraq 0 229 83 20Jordan 18 271 82 0.1 8.4 42Kuwait 158 678 505 31.6 377Lebanon 194 907 375 1.4 141Libya 4 259 140 14Mauritania 0 146 24 1.3 1Morocco 13 247 115 0.7 27Oman 49 607 694 2.7 28PalestineQatar 450 404 161Saudi Arabia 40 321 262 59Somalia 53 15 1Sudan 0 272 86 0.0 0.9 27Syria 0 278 70 1.4 20Tunisia 6 224 100 3.4 31UAE 283 355 134 21.0 170Yemen 2 64 29 15
Arab States 12 320 184 0.5 6.6 70
SOURCE WDI, 2001 UNESCO UNESCO UNESCO UNESCO UNESCO
Radio, Television, & Fax Machines
Market Capital Market Capital (1 of 2)(1 of 2)
% of Mfg. % of Mfg. Domestic Granted
Total (A) (B) Receipts Payments Apps. by USPTO Books Periodicals
($ millions) (%) (%) ($ millions) ($ millions) (/M people) ($) ($)1999 1999 1999 1999 1999 1998 2000 LYA LYA
MC01 MC02 MC03 MC04 MC05 MC06 MC07 MC08 MC09Algeria 16 4 0.656 42 0.000 17 1,410Bahrain 1.183 23 1ComorosDjiboutiEgypt 3 0 0 47 329 494 0.079 4,588 2,266Iraq 68Jordan 15 2 0.328 0 0.311 15,137Kuwait 35 1 0.164 2.747 699 138Lebanon 1.183LibyaMauritania 0 0Morocco 10 0 0 6 201 90 0.118 860 8Oman 118 10 1.639 0.000 446 115PalestineQatar 0.000Saudi Arabia 18 0 0 0 0 45 1.140 1,032 34SomaliaSudan 0 0 0 0 6 2 8Syria 0.381 560Tunisia 125 3 0.492 10 3 46 0.000 1,364 381UAE 2Yemen 0 0.000 20
Arab States 1336 2 0.410 63 548 926 0.549 24,748 4,363
SOURCE WDI, 2001 HDR, 2001 WDI, 2001 HDR, 2001 HDR, 2001 WDI, 2001 USPTO UNESCO UNESCO
High-Technology Exports Royalty & License Fees $000's Spent on ExportsPatents
Market Capital Market Capital (2 of 2)(2 of 2)
Citations Meetings Study Abroad
Number vs. studying
Hosted domestically
(%)93-97 2000 LYAMC10 MC11 MC12
Algeria 1,814 18 7.4Bahrain 9Comoros 0Djibouti 1Egypt 9,730 143 0.9Iraq 327 5Jordan 1,018 17 15.4Kuwait 1,576 6Lebanon 715 20 12.9Libya 5Mauritania 3Morocco 3,031 74 11.9Oman 4Palestine 0Qatar 7Saudi Arabia 7,826 4 2.8Somalia 1Sudan 852 8Syria 11 6.8Tunisia 2,148 46 9.4UAE 1,352 19Yemen 3
Arab States 29,050 404 8.4
SOURCE IBRD (2000) ICCA (2000)
Renewal Renewal Capital (1 of 3)Capital (1 of 3)
National Public Institution Technical Sci & Tech ISI Social Sci. Book PeriodicalLibraries Libraries Libraries Papers Articles Publications Papers Imports Imports
('000's) ('000's) ('000's) (/M people) ($000's) ($000's)LYA LYA LYA 1997 1997 1995 - 2001 1995 LYA LYARC01 RC02 RC03 RC04 RC05 RC06 RC07 RC08 RC09
Algeria 623 2.063 139 2,480 291 9,717 584Bahrain 35 522 4,301 1,038Comoros 9Djibouti 16 1,305 163Egypt 1,154 1,500 35,790 3.925 1,108 16,349 2,091 13,358 3,387Iraq 35 500 84Jordan 706 1,227 4.973 177 3,563 278 6,734 320Kuwait 272 6.341 173 3,711 324 8,767 6,023Lebanon 2,075 4.134 81 4,828 110Libya 352 28,958 64Mauritania 2 72Morocco 3.061 271 5,939 554 21,542 13,943Oman 4 101 4.536 53 1,229 3,703 2,442Palestine 349 89Qatar 228 138 329 368 368Saudi Arabia 4,844 4.755 613 11,260 1,409 61,373 769Somalia 15Sudan 43 681 101 432 726Syria 150 10 0.361 57 760 889Tunisia 2,493 4.180 188 3,400 300 14,642 5,923UAE 13 5.245 127 2,216 224 289Yemen 0.125 10 221 827 570
Arab States 2,865 4,403 44,773 3.642 3,123 58,580 5,555 176,548 36,609
SOURCE UNESCO UNESCO UNESCO WDI, 2001 HDR, 2001 ISI, 2001 IBRD, 2000 UNESCO UNESCO
Number of Books Publications Importing Information
Renewal Renewal Capital (2 of 3)Capital (2 of 3)
Students in # in # of # of # in # in # inTotal % of GNI Tertiary R&D Technicians Researchers Ministry Universities Private Sect.
($000's) (%) (%) (/M people) (/M people) (/Million) (/M people) (/M people) (/M people)1996 87-97 1987-1997 1987-1997 1987-1997 LYA 1996 1996 1996RC10 RC11 RC12 RC13 RC14 RC15 RC16 RC17 RC18
Algeria 33,561 58 529 475 0Bahrain 3,736 39 27 59 0ComorosDjiboutiEgypt 227,499 0.22 15 459 341 459 8,074 2,384 286Iraq 27,573 41 729 662 0Jordan 20,615 0.26 28 94 10 94 215 140 46Kuwait 67,113 0.16 29 230 71 230 334 83 23Lebanon 7,453 30 93 112 0Libya 16,921 8 362 130 105 0Mauritania 4,304 41 76 40 0Morocco 74,871 41 824 750 52Oman 10,755 13 56 26 0PalestineQatar 5,461 594 4 30 0Saudi Arabia 196,094 17 308 538 0SomaliaSudan 10,044 16 500 143 0Syria 24,184 0.20 23 30 25 30 210 146 0Tunisia 28,901 0.30 33 125 57 125 267 218 0UAE 10,886 24 56 51 0Yemen 10,297 5 204 66 0
Arab States 780,268 0.23 29 188 101 271 702 335 23
SOURCE WDI, 2001 WDI, 2001 UNESCO
Scientists and Engineers Research and DevelopmentR&D Expenditures
Renewal Renewal Capital (3 of 3)Capital (3 of 3)
Patents
GNP Govn't Tertiary Pre- ForeignExpenditure Expenditure Primary Primary Secondary Tertiary Apps.
(%) (%) (% of RC20)1995-1997 1995-1997 LYA LYA LYA LYA LYA 1998
RC19 RC20 RC21 RC22 RC23 RC24 RC25 RC26Algeria 5.10 16.40 73.40 25.13 27.35 17.09 17.45 264 Bahrain 4.40 12.00 31.26 11.72Comoros 29.63 52.07 35.86Djibouti 65.90 33.66 28.21Egypt 4.80 14.90 14.10 24.07 24.18 18.63 1,139 Iraq 40.60 17.56 19.96 19.80 19.24 18 Jordan 7.90 19.80 53.00 20.75 24.73 21.41Kuwait 5.00 14.00 30.50 15.48 13.18 10.64 17.45Lebanon 2.50 8.20 32.69 7.81Libya 14.30Mauritania 5.10 16.20 49.60 7.41 50.23 26.39 31.47Morocco 24.90 40.30 21.01 27.63 16.28 237 Oman 4.50 16.40 31.60 20.14 26.01 17.60 12.27Palestine 85.00 41.27 0.72 20.30Qatar 3.40 53.70 21.86 62.07 9.61 13.18Saudi Arabia 7.50 22.80 43.80 11.10 12.86 12.94 17.27 1,286 Somalia 11.71 19.01 18.50 6.30Sudan 1.40 43.30 38.64 29.13 25.72 29.28 67,713 Syria 4.20 13.60 43.10 22.17 23.46 396.44 35.32Tunisia 7.70 19.90 43.40 2.35 22.81 18.34 128 UAE 1.70 20.30 38.70 17.89 16.07 12.38 8 Yemen 7.00 21.60 80.00 17.65 29.84 20.77
Arab States 4.81 17.21 47.05 19.79 28.16 39.47 18.59 70,793
SOURCE HDR, 2001 HDR, 2001
Public Expenditure on Education Staff to Pupil Ratio
Sampling for Sampling for the NICIthe NICI
Total Population Total GDP (millions) ($ U.S. billions) 2000 1999 Algeria 30.31 47.872 Egypt 67.89 89.148 Jordan 4.91 8.073 Kuwait 1.91 29.572 Morocco 29.88 34.998 Oman 2.54 14.962 Saudi Arabia 20.35 139.383 Sudan 31.10 9.718 Tunisia 9.46 20.944 Yemen 18.35 6.825 Sample Arab States 216.70 401.500
10 of 22 countries representing 77% of the population
Development of Development of the NHCIthe NHCI
Index H1 H2 H3 H4 H5 H6 H7 Metric HC02 HC05 HC11 HC16 HC23 HC25 HC26
NHCITM
Algeria 0.633 0.124 0.930 0.498 0.368 0.82 0.79 0.586 Egypt 0.553 0.077 0.998 0.544 0.793 0.88 0.85 0.647 Jordan 0.898 1.000 0.467 1.000 1.000 0.63 0.63 0.842 Kuwait 0.823 0.151 1.000 0.672 0.923 0.63 0.62 0.726 Morocco 0.489 0.135 0.910 0.453 0.374 0.55 0.51 0.481 Oman 0.719 0.114 0.990 0.274 0.135 0.75 0.75 0.537 S. Arabia 0.770 0.114 1.000 0.585 0.308 0.87 0.75 0.638 Sudan 0.571 0.241 0.611 0.084 0.173 0.46 0.41 0.382 Tunisia 0.708 0.183 0.933 0.560 0.430 0.87 0.85 0.644 Yemen 0.462 0.236 0.743 0.156 0.110 0.83 0.51 0.410 Weighting 30% 10% 10% 15% 15% 10% 10% H1 HC02 literacy rate H2 HC05 number of tertiary schools per capita relative to highest value H3 HC11 percentage of primary teachers with required qualifications H4 HC16 number of tertiary students per capita relative to highest value H5 HC23 cumulative tertiary graduates per capita relative to highest value H6 HC25 percentage of male grade 1 net intake H7 HC26 percentage of female grade 1 net intake
Development of Development of the NPCIthe NPCI
Index P1 P2 P3 P4 P5 P6 P7 P8 Metric PC01 PC08 PC09 PC10 PC12 PC13 PC14 PC17
NPCITM
Algeria 0.217 0.048 0.000 0.013 0.013 0.357 0.151 0.101 0.117 Egypt 0.313 0.099 0.037 0.056 0.051 0.468 0.171 0.101 0.168 Jordan 0.363 0.115 0.063 0.047 0.114 0.400 0.118 0.111 0.178 Kuwait 1.000 1.000 1.000 1.000 1.000 1.000 0.728 1.000 0.973 Morocco 0.221 0.089 0.014 0.032 0.082 0.364 0.166 0.072 0.130 Oman 0.375 0.218 0.130 0.376 0.310 0.895 1.000 0.074 0.385 S. Arabia 0.538 0.473 0.066 0.282 0.253 0.473 0.378 0.156 0.327 Sudan 0.038 0.024 0.000 0.003 0.000 0.401 0.124 0.072 0.073 Tunisia 0.375 0.126 0.004 0.061 0.038 0.330 0.144 0.082 0.158 Yemen 0.071 0.882 0.003 0.010 0.013 0.094 0.042 0.040 0.125 Weighting 20% 10% 15% 10% 10% 10% 10% 15% P1 PC01 telephone mainlines per capita relative to highest value P2 PC08 personal computers per capita relative to highest value P3 PC09 Internet hosts per capita relative to highest value P4 PC10 Internet users per capita relative to highest value P5 PC12 mobile phones per capita relative to highest value P6 PC13 radio receivers per capita relative to highest value P7 PC14 television sets per capita relative to highest value P8 PC17 newspaper circulation per capita relative to highest value
Development of Development of the NMCIthe NMCI
Index M1 M2 M3 Metric MC01 MC08 MC11
NMCITM
Algeria 0.042 0.000 0.122 0.062 Egypt 0.004 0.027 0.433 0.183 Jordan 0.236 1.000 0.712 0.655 Kuwait 0.150 0.013 0.646 0.307 Morocco 0.036 0.013 0.509 0.219 Oman 1.000 0.016 0.324 0.434 S. Arabia 0.016 0.004 0.040 0.022 Sudan 0.000 0.000 0.053 0.021 Tunisia 0.757 0.035 1.000 0.637 Yemen 0.000 0.002 0.034 0.014 Weighting 30% 30% 40%
M1 MC01 high-technology exports as a percentage of GDP relative to highest value M2 MC08 number of patents granted by USPTO per capita relative to highest value M3 MC11 number of meetings hosted per capita relative to highest value
Development of Development of the NRCIthe NRCI
Index R1 R2 R3 R4 R5 R6 R7 Metric RC08 RC09 RC10 RC12 RC16 RC17 RC21
NRCITM
Algeria 0.243 0.031 0.275 0.580 0.066 0.199 0.734 0.254 Egypt 0.180 0.095 0.999 0.150 1.000 1.000 0.141 0.699 Jordan 1.000 0.099 1.000 0.280 0.027 0.059 0.530 0.480 Kuwait 0.355 0.511 0.889 0.290 0.041 0.035 0.305 0.411 Morocco 0.738 1.000 0.838 0.410 0.102 0.315 0.403 0.564 Oman 0.297 0.410 0.281 0.130 0.007 0.011 0.316 0.187 S. Arabia 0.528 0.014 0.551 0.170 0.038 0.226 0.438 0.309 Sudan 0.053 0.188 0.405 0.160 0.062 0.060 0.433 0.204 Tunisia 0.838 0.710 0.540 0.330 0.033 0.091 0.434 0.395 Yemen 0.145 0.210 0.591 0.050 0.025 0.028 0.800 0.267 Weighting 10% 10% 30% 10% 15% 20% 5% R1 RC08 book imports as a percentage of GDP relative to highest value R2 RC09 periodical imports as a percentage of GDP relative to highest value R3 RC10 total R&D expenditures as a percentage of GDP relative to highest value R5 RC16 number of ministry employees in R&D per capita relative to highest value R6 RC17 number of university employees in R&D per capita relative to highest value R7 RC21 tertiary expenditure as a percentage of public education funding
Countries Countries Ranked by NICIRanked by NICI
NHCITM NMCITM NPCITM NRCITM NICITM FC
Kuwait 0.726 0.307 0.973 0.411 0.604 1.000 Jordan 0.842 0.655 0.178 0.480 0.539 0.229 Tunisia 0.644 0.637 0.158 0.395 0.459 0.345 Egypt 0.647 0.183 0.168 0.699 0.424 0.198 Oman 0.537 0.434 0.385 0.187 0.386 0.773 Morocco 0.481 0.219 0.130 0.564 0.349 0.198 S. Arabia 0.638 0.022 0.327 0.309 0.324 0.626 Algeria 0.586 0.062 0.117 0.254 0.255 0.293 Yemen 0.410 0.014 0.125 0.267 0.204 0.047 Sudan 0.382 0.021 0.073 0.204 0.170 0.038
FC FC01 national financial capital, GDP per capita relative to highest value
Is the NICI a good predictor of a nation’s wealth?
Structural Structural Model of NICIModel of NICI
Hypothesis H1 H2 H3 H4 H5 H6 coefficient 0.450 0.106 0.775 0.279 0.273 0.277
National Human Capital
National Process Capital
National Market Capital
National Renewal Capital
National Financial Capital
H3
H1
H4
H2
H5
H6
R2 = 20.9%
Clustering Clustering by by NICINICI and GDP and GDP
Relative FCGDP / capita
NICITM
1.0
0.5
0.00.0 0.5 1.0
Kuwait
JordanTunisia
Egypt
Morocco
Yemen
Algeria
Oman
S. Arabia
Sudan
National Financial Capital
R2 = 20.9%
ConclusionsConclusionsNational intellectual capital accounts for nearly one-fifth of the explanatory power of the financial wealth of an Arab country.
Human capital is the pre-eminent antecedent for the intellectual wealth of a nation. As a nation’s citizens codify their knowledge into the systems and processes of a country (H1), those structural capital assets can then be renewed for the future (H2) by investing in research and development. A feedback loop further develops a nation’s human capital (H3). Eventually, the codified knowledge base of a nation can be marketed (H4) within the global and domestic economies. As the human capital continually develops (H5), a nation’s ability to market its intellectual wealth will result in a higher financial well-being (H6).
Future Future ResearchResearch
• Larger sample across many more nations (allows for bench-marking).
• Longitudinal nature of impacts (i.e., time lag effects of constructs and measures).
• Alternative financial capital measures • In-depth intra-national analysis (i.e.,
within industrial sectors or sub-geographies)
• Intermediating effects (i.e., poverty, gender empowerment, health)
Customer Capital
Organizational Capital
Innovation Capital
Process Capital
Structural Capital
Human Capital
Intellectual Capital
Financial Capital
Market Value
Conceptual Model - Firm
Conceptual Model - Nation
Market Capital
Organizational Capital
Renewal Capital
Process Capital
Structural Capital
Human Capital
Intellectual Capital
Financial Wealth
National Wealth
Developed Nations
NorwayRussia
Singapore
ItalyJapan
New Zealand
SwedenUK
USA
AustraliaCanadaChina
FinlandFrance
Germany
Descriptive Statistics (1 of 2)
GDP/Cap PPP 2000 Pop 2015 Pop 2015 - 2000$ Millions Millions % Change
Australia 25,693 19 21.9 14%Canada 27,840 31 34.4 12%China 3,976 1,263 1410.2 12%Finland 24,996 5 5.2 0%France 24,223 59 61.9 5%Germany 25,103 82 80.7 -2%Italy 23,626 58 55.2 -4%Japan 26,755 127 127.5 0%New Zealand 20,070 4 4.1 7%Norway 29,918 4 4.7 5%Russia 8,377 146 133.3 -8%Singapore 23,356 4 4.8 19%Sweden 24,277 9 8.6 -3%United Kingdom 23,509 60 60.6 1%United States 34,142 282 321.2 14%
Descriptive Statistics (2 of 2)
Unemploy Youth Unemp Urban Pop Svc Empt Life ExpRate % Rate % % of total % of total Years
Australia 6.3 14 85 73.6 78.9Canada 6.8 14 77 74.1 78.9China 3.1 3 32 12.9 70.3Finland 9.8 22 67 66.0 77.5France 9.5 27 76 74.0 78.9Germany 7.5 8 88 62.6 77.4Italy 10.7 33 67 62.2 78.7Japan 4.7 9 79 63.1 80.7New Zealand 6.0 14 87 67.6 78.2Norway 3.4 10 76 73.8 78.6Russia 13.3 7 73 58.8 65.3Singapore 3.2 8 100 71.1 77.7Sweden 4.7 14 83 72.2 79.6United Kingdom 5.5 12 90 72.8 77.3United States 4.0 10 77 74.5 77.1
Prime Minister’s Report
Category Canada's Performance Top Performer
Economy Average U.S.
Labour markets Top U.S.
Innovation Poor Sweden
Environment Poor Sweden
Education Average U.S.
Health Average Japan
Financial Capital
GDP/Cap PPP GDP, PPP Market Cap (listed)$ $ billions % of GDP
Australia 25,693 493 95.6Canada 27,840 856 122.3China 3,976 5,019 53.8Finland 24,996 129 241.7France 24,223 1,427 111.8Germany 25,103 2,062 67.8Italy 23,626 1,363 71.5Japan 26,755 3,394 65.2New Zealand 20,070 77 37.3Norway 29,918 134 40.2Russia 8,377 1,219 15.5Singapore 23,356 94 165.7Sweden 24,277 215 144.4United Kingdom 23,509 1,404 182.2United States 34,142 9,613 153.5
Human Capital (1 of 2)
Adult literacy Secondary Public $ on Educ. Pupil:Teacher% age > 15 enrolment % % of GDP Ratio
Australia 99.9 79 4.8 4.8Canada 99.9 94 5.6 5.6China 84.1 50 2.3 23.7Finland 99.9 95 7.1 17.8France 99.9 94 5.9 5.9Germany 99.9 88 4.6 4.6Italy 98.4 88 4.7 4.7Japan 99.9 97 3.5 3.5New Zealand 99.9 84 7.2 7.2Norway 99.9 96 7.7 7.7Russia 99.6 78Singapore 92.3 75 25.4Sweden 99.9 100 8.0 8.0United Kingdom 99.9 94 4.7 4.7United States 99.9 90 5.0 5.0
Human Capital (2 of 2)
Teachers' comp Educ exp Edu Exp% of Educ Exp as % of GNP as % of Gov Exp
Australia 5.5 13.5Canada 18.0 6.9 12.9China 21.5 2.3 12.2Finland 17.3 7.5 12.2France 18.9 6.0 10.9Germany 17.0 4.8 9.6Italy 11.3 4.9 9.1Japan 21.0 3.6 9.9New Zealand 7.3 17.1Norway 7.7 16.8Russia 17.6 3.5 9.6Singapore 25.3 3.0 23.3Sweden 12.3 8.3 12.2United Kingdom 19.1 5.3 11.6United States 15.4 5.4 14.4
Process Capital (1 of 2)
Telephones Moblies TV sets Cable TV PCs Radios Internet hosts per 1,000 per 1,000 per 1,000 per 1,000 per 1,000 per 1,000 per 1,000
Australia 525 447 738 68 465 1,376 85.7Canada 677 285 715 259 390 1,047 77.4China 112 66 293 61 16 339 0.1Finland 550 720 692 184 396 1,564 102.3France 579 493 628 45 304 950 19.1Germany 611 586 586 247 336 948 24.8Italy 474 737 494 1 180 878 17.8Japan 586 526 725 147 315 956 36.5New Zealand 500 563 522 4 360 997 90.6Norway 532 751 669 184 491 915 101.1Russian Federation 218 22 421 78 43 418 2.2Singapore 484 684 304 63 483 672 45.2Sweden 682 717 574 199 507 932 67.3United Kingdom 589 727 653 57 338 1,432 28.2United States 700 398 854 252 585 2,118 295.2
Process Capital (2 of 2)
Electricity consumption IT exp. IT Exp. / capita Internet users (active)kwh per capita % of GDP US$ % of population
Australia 8,884 9.7 1,922 34%Canada 15,260 8.4 1,911 41%China 758 5.4 46 2%Finland 14,366 7.8 1,835 37%France 6,392 8.7 1,916 14%Germany 5,690 7.9 1,798 29%Italy 4,535 5.7 1,068 23%Japan 7,443 8.3 3,118 37%New Zealand 8,426 13.6 1,771 22%Norway 24,248 6.9 2,445 49%Russian Federation 4,050 3.7 63 2%Singapore 6,641 9.7 2,104 30%Sweden 14,138 10.4 2,674 46%United Kingdom 5,384 9.1 2,187 30%United States 11,994 8.1 2,926 34%
Market Capital (1 of 1)High-tech exports License fees receipts Outgoing Int. telecom Daily newspapers % of Mfg. exports US$ per person mins / subscriber per 1,000
Australia 15.22 17.9 136 293Canada 18.60 44.7 347 159China 18.58 0.1 11Finland 27.33 219.9 164 455France 24.26 39 129 201Germany 17.71 34.4 184 305Italy 9.19 9.8 101 104Japan 28.35 80.5 35 578New Zealand 10.16 12.9 340 207Norway 17.13 29.3 234 581Russia 13.53 0.6 29 105Singapore 63.00 538 298Sweden 22.00 144.2 209 432United Kingdom 32.00 123.9 227 329United States 34.00 134.3 153 213
Renewal Capital (1 of 2)
R&D Exp. R&D Scientists Science students% of GDP per million % of tertiary
Australia 1.7 3,320 24.2Canada 1.7 3,009 15.7China 0.1 459 53.0Finland 2,668 36.6France 2.2 2,686 48.0Germany 2.3 2,873 39.2Italy 1.0 1,322 30.8Japan 2.8 4,960 26.7New Zealand 1.2 2,197 19.9Norway 1.7 4,095 26.1Russia 1.1 3,397 48.0Singapore 1.1 2,182 18.5Sweden 3.8 4,507 37.6United Kingdom 1.8 2,678 29.0United States 2.5 4,103 36.5
Renewal Capital (2 of 2)
License fees paymt. Trademarks filed Patents grantedUS$ per person per million per million
Australia 52 3,065 75Canada 106 1,313 31China 1 131 1Finland 106 1,828 187France 35 1,708 205Germany 66 1,044 235Italy 21 778 13Japan 87 961 994New Zealand 80 4,327 103Norway 87 3,026 103Russia 0 199 131Singapore 0 3,921 8Sweden 101 1,755 271United Kingdom 103 1,186 82United States 57 926 289
Development of the NFCI
GDP/Cap PPP GDP, PPP Market Cap (listed) NFCI$ $ billions % of GDP
United States 34,142 9,613 153.5 3.64Finland 24,996 129 241.7 3.02United Kingdom 23,509 1,404 182.2 1.64Singapore 23,356 94 165.7 1.16Canada 27,840 856 122.3 1.11Sweden 24,277 215 144.4 .89France 24,223 1,427 111.8 .32Australia 25,693 493 95.6 .15Japan 26,755 3,394 65.2 -.03Norway 29,918 134 40.2 -.29Germany 25,103 2,062 67.8 -.38Italy 23,626 1,363 71.5 -.63New Zealand 20,070 77 37.3 -2.07China 3,976 5,019 53.8 -4.09Russia 8,377 1,219 15.5 -4.45
Development of the NHCI
H1 H2 H3 H4 H5 H6 H7 NHCISweden 99.9 100 8.0 8.0 12.3 8.3 12.2 1.27Norway 99.9 96 7.7 7.7 7.7 16.8 .71Canada 99.9 94 5.6 5.6 18.0 6.9 12.9 .49Finland 99.9 95 7.1 17.8 17.3 7.5 12.2 .46Italy 98.4 88 4.7 4.7 11.3 4.9 9.1 .44France 99.9 94 5.9 5.9 18.9 6 10.9 .40New Zealand 99.9 84 7.2 7.2 7.3 17.1 .40United States 99.9 90 5.0 5.0 15.4 5.4 14.4 .31United Kingdom 99.9 94 4.7 4.7 19.1 5.3 11.6 .20Germany 99.9 88 4.6 4.6 17.0 4.8 9.6 .19Australia 99.9 79 4.8 4.8 5.5 13.5 -.01Japan 99.9 97 3.5 3.5 21.0 3.6 9.9 -.10Russia 99.6 78 17.6 3.5 9.6 -.22Singapore 92.3 75 25.4 25.3 3 23.3 -1.86China 84.1 50 2.3 23.7 21.5 2.3 12.2 -2.69
Development of the NPCI
PC1 PC2 PC3 PC4 PC5 PC6 PC7 PC8 PC9 PC10 PC11 NPCIUnited States 700 398 854 252 585 2,118 295.2 11,994 8.1 2,926 34% 1.53Norway 532 751 669 184 491 915 101.1 24,248 6.9 2,445 49% .88Sweden 682 717 574 199 507 932 67.3 14,138 10.4 2,674 46% .85Finland 550 720 692 184 396 1,564 102.3 14,366 7.8 1,835 37% .64Canada 677 285 715 259 390 1,047 77.4 15,260 8.4 1,911 41% .58Australia 525 447 738 68 465 1,376 85.7 8,884 9.7 1,922 34% .36Japan 586 526 725 147 315 956 36.5 7,443 8.3 3,118 37% .34United Kingdom 589 727 653 57 338 1,432 28.2 5,384 9.1 2,187 30% .18Germany 611 586 586 247 336 948 24.8 5,690 7.9 1,798 29% .05New Zealand 500 563 522 4 360 997 90.6 8,426 13.6 1,771 22% -.05Singapore 484 684 304 63 483 672 45.2 6,641 9.7 2,104 30% -.20France 579 493 628 45 304 950 19.1 6,392 8.7 1,916 14% -.30Italy 474 737 494 1 180 878 17.8 4,535 5.7 1,068 23% -.76Russia 218 22 421 78 43 418 2.2 4,050 3.7 63 2% -1.92China 112 66 293 61 16 339 0.1 758 5.4 46 2% -2.17
Development of the NRCI
RC1 RC2 RC3 RC4 RC5 RC6 NRCIJapan 2.8 4,960 26.7 87 961 994 1.97449Sweden 3.8 4,507 37.6 101 1,755 271 1.45856United States 2.5 4,103 36.5 57 926 289 .59575Norway 1.7 4,095 26.1 87 3,026 103 .47169Canada 1.7 3,009 15.7 106 1,313 31 .28614Finland 2,668 36.6 106 1,828 187 .18849Germany 2.3 2,873 39.2 66 1,044 235 .17207United Kingdom 1.8 2,678 29.0 103 1,186 82 .12403Australia 1.7 3,320 24.2 52 3,065 75 .02155New Zealand 1.2 2,197 19.9 80 4,327 103 -.16539France 2.2 2,686 48.0 35 1,708 205 -.22504Russia 1.1 3,397 48.0 0 199 131 -.77830Singapore 1.1 2,182 18.5 0 3,921 8 -.83511Italy 1.0 1,322 30.8 21 778 13 -1.17329China 0.1 459 53.0 1 131 1 -2.11564
Development of the NMCI
MC1 MC2 MC3 MC4 NMCISingapore 63.00 538 298 2.11881Finland 27.33 219.9 164 455 1.30552United Kingdom 32.00 123.9 227 329 .78730Sweden 22.00 144.2 209 432 .72343United States 34.00 134.3 153 213 .53448Japan 28.35 80.5 35 578 .43603Norway 17.13 29.3 234 581 .19953Canada 18.60 44.7 347 159 -.19449Germany 17.71 34.4 184 305 -.38188France 24.26 39 129 201 -.45042New Zealand 10.16 12.9 340 207 -.60013Australia 15.22 17.9 136 293 -.69522China 18.58 0.1 11 -.95016Italy 9.19 9.8 101 104 -1.38288Russia 13.53 0.6 29 105 -1.44992
Countries Ranked by NICI
Is the NICI a good predictor of a nation’s wealth?
NHCI NPCI NRCI NMCI NICI NFCISweden 1.27062 .84501 1.45856 .72343 1.07440 .89213United States .30747 1.53446 .59575 .53448 .74304 3.63611Japan -.10460 .33760 1.97449 .43603 .66088 -.02992Finland .46333 .63571 .18849 1.30552 .64827 3.02013Norway .71069 .88401 .47169 .19953 .56648 -.28583United Kingdom.20407 .18041 .12403 .78730 .32395 1.64398Canada .49292 .58380 .28614 -.19449 .29209 1.11303Germany .18696 .04741 .17207 -.38188 .00614 -.38255Australia -.01249 .36316 .02155 -.69522 -.08075 .15366New Zealand .40285 -.04699 -.16539 -.60013 -.10241 -2.06696France .40326 -.30324 -.22504 -.45042 -.14386 .31559Singapore -1.85927 -.20475 -.83511 2.11881 -.19508 1.15927Italy .44235 -.76415 -1.17329 -1.38288 -.71949 -.62521Russia -.22235 -1.92334 -.77830 -1.44992 -1.09348 -4.45314China -2.68582 -2.16912 -2.11564 -.95016 -1.98019 -4.09029
Structural Model of NICI
Path H1 H2 H3 H4 H5 H6 Arab Region coefficient 0.450 0.106 0.775 0.279 0.273 0.277
National Human Capital
National Process Capital
National Market Capital
National Renewal Capital
National Financial Capital
H3
H1
H4
H2
H5
H6
R2 = 20.9%
G8 + coefficient 0.742 0.868 0.771 0.645 -0.418 -0.670
National Human Capital
National Process Capital
National Market Capital
National Renewal Capital
National Financial Capital
H3
H1
H4
H2
H5
H6
R2 = 20.9%
0.9130.2080.454-0.544-0.578-0.4180.6450.7710.8680.742 coefficientG8 +
-0.670-0.4180.6450.7710.8680.742 coefficientG8 +
0.2770.2730.2790.7750.1060.450 coefficientArab Region
H10H9H8H7H6H5H4H3H2H1Path
0.9130.2080.454-0.544-0.578-0.4180.6450.7710.8680.742 coefficientG8 +
-0.670-0.4180.6450.7710.8680.742 coefficientG8 +
0.2770.2730.2790.7750.1060.450 coefficientArab Region
H10H9H8H7H6H5H4H3H2H1Path
Modified NICI ?
0.993-0.6700.2080.454-0.544-0.4180.6450.7710.8680.742 coefficientG8 +
-0.670-0.4180.6450.7710.8680.742 coefficientG8 +
0.2770.2730.2790.7750.1060.450 coefficientArab Region
H10H9H8H7H6H5H4H3H2H1Path
0.993-0.6700.2080.454-0.544-0.4180.6450.7710.8680.742 coefficientG8 +
-0.670-0.4180.6450.7710.8680.742 coefficientG8 +
0.2770.2730.2790.7750.1060.450 coefficientArab Region
H10H9H8H7H6H5H4H3H2H1Path
Poverty
GenderEmpowerment
Health
H7
H8
H9
H10
R2 = 83.3%
0.913-0.6700.578
Poverty
UN Human Poverty Probability not People lacking Population below PovertyIndex @ surviving to 60 functional skills poverty line
United States 15.8 12.8 20.7 16.9 1.61749Russian Federation 30.1 20.1 1.25961United Kingdom 15.1 9.9 21.8 13.4 1.23980Australia 12.9 9.1 17.0 14.3 .56012Canada 12.3 9.5 16.6 12.8 .32925Italy 12.2 9.1 14.2 .28208New Zealand 10.7 18.4 .26560China .00000Singapore .00000Japan 11.2 8.2 11.8 -.08392France 11.1 11.4 8.0 -.31247Germany 10.5 10.6 14.4 7.5 -.51778Finland 8.8 11.3 10.4 5.1 -1.28109Norway 7.5 9.1 8.5 6.9 -1.55023Sweden 6.7 8.0 7.5 6.6 -1.80848
Health
Life Expectancy Baby measles Physicians Health Exp. HealthYears % immunized per 100,000 per Capita PPP
Italy 78.7 90 554 1,676 2.18991Germany 77.4 95 350 2,697 1.33894Norway 78.6 93 413 3,182 .93127United States 77.1 92 279 4,271 .71905France 78.9 84 303 2,288 .57583Sweden 79.6 96 311 2,145 -.02859Australia 78.9 89 240 1,714 -.18666New Zealand 78.2 83 218 1,163 -.22436Japan 80.7 94 193 2,243 -.35919Finland 77.5 96 299 1,704 -.37005Russia 65.3 97 421 -.42537Canada 78.9 96 229 1,939 -.51542United Kingdom 77.3 91 164 1,675 -.73388Singapore 77.7 93 163 678 -1.21061China 70.3 90 162 40 -1.70086
Gender Empowerment
UN GEM % Seats in Female pros Income Gender EmpowerValue parliament % of total ratio
Finland 0.803 36.5 27 0.70 1.51276Sweden 0.824 42.7 49 0.68 1.40361Norway 0.837 36.4 49 0.64 1.08853New Zealand 0.765 30.8 54 0.67 .70486Australia 0.759 26.5 48 0.69 .70061Canada 0.777 23.6 53 0.62 .33363Germany 0.765 31.0 50 0.50 .13904China 21.8 -.00311United States 0.757 13.8 54 0.62 -.07301United Kingdom 0.684 17.1 45 0.61 -.11351France 10.9 -.36633Singapore 0.592 11.8 42 0.50 -.95806Russia 0.450 6.4 64 0.64 -1.39917Italy 0.539 9.1 44 0.44 -1.47306Japan 0.527 10.0 45 0.44 -1.49677
Clustering by NICI and GDP
RelativeGDP / capita
NICI
1.0
0.5
0.00.0 0.5 1.0
Sudan
Kuwait
JordanTunisia
Egypt
Morocco
Yemen
Algeria
Oman
S. Arabia ?
G8 + by NICI and NCFI
RelativeNFCI
Relative NICI
4.0
0.0
-4.0-2.0 -1.0 0.0 1.0 2.0
United States
CanadaSweden
Russia
Japan
Finland
Norway
United Kingdom
Germany
Australia
New Zealand
FranceSingapore
Italy
China
Further Developments ...
• IICR KM Diagnostic Tool (business and government)– Health, financial services, software, chemical, hospital
• IICR KM Seminars (business and government) - certification• Education (McMaster University, Tangonow.net)• eFlow Audit (codified proxy of e-mail flow)• World Congress (http://worldcongress.mcmaster.ca) Jan 19-21, 2005• Journal of Intellectual Capital (http://www.emeraldinsight.com/jic.htm)• 1 text Oxford U. Press with Choo, 1 books with BH KMCI Press• Knexa.com (Tribute incentive methodology, ICUs, rewards)• NICI (National Intellectual Capital Index) for United Nations• Longitudinal causal mapping with integration (RBC project)• Citation impact (literature and cases)• Knowledge auction experiments
Knexa Knexa SolutionsSolutions
• New knowledge assets with old value measures• Market mechanism “the invisible hand of the
market”• Exchanges
– what’s next? … talent markets … total markets
• Internet Auction Model– E-bay, Yahoo, Bid.com, etc. … stickiness, bid-ask
• Cost / benefit micro calculation• ICUs – electronic tokens and the reward of
redemption
5 To Do’s 5 To Do’s ImmediatelyImmediately
1. Raise awareness about knowledge era challengesAction: Fully engage employees about KM
2. Don’t throw training dollars down the toiletAction: Benchmark your T&D / FTE investment
3. Attempt to recoup talent that leaves the firmAction: Implement universal exit (entry) interviews
4. Accelerate your knowledge absorption rateAction: speed reading test (www.bontis.com/speedread)
5. Be mindful of technology investmentsAction: Test that search costs are reduced
Dr. Nick Bontis Ph.D.
DeGroote Business SchoolMcMaster UniversityTel: (905) 525-9140 x23918Fax: (905) 304-7734Director, Institute for Intellectual Capital ResearchChief Knowledge Officer (CKO), Knexa SolutionsAssociate Editor, Journal of Intellectual Capital
nick@bontis.com www.NickBontis.com
Thank Thank you!you!
Speaking, training Keynotes, seminars Consulting, surveys www.NickBontis.com