Dynamic intellectual capital in global rapidly changing industries

This paper introduces a newly developed knowledge management concept, dynamic intellectual capital (IC), which refers to a company’s ability for self‐renewal. The paper presents how dynamic IC is created in three different knowledge environments – mechanistic, organic and dynamic – and brings out relevant empirical evidence from three case studies of multinational and Chinese firms. The paper concludes that knowledge‐intensive organizations need to master all the three knowledge environments regardless of their different strategic focus. Failures on any environment might form a hindrance for market efficiency. The development of dynamic IC is subject to the firm’s ability to balance both current arena (e.g. realized IC) and potential force (e.g. potential IC). The development of dynamic IC is strongly based on multi‐way communication, which must include both top‐down and bottom‐up as well as cross functional communication. The analysis of tensions, problems and challenges can be a critical step toward a self‐renewing organization in managing such complexity of dynamic IC.