Value Added Intellectual Co-efficient (VAICTM) A popular methodology to measure Intellectual Captial

The aim of this paper is to theoretically examine Value Added Intellectual coefficient (VAICTM) as a methodology to measure Intellectual Capital (IC).

The value added intellectual coefficient (VAICTM) approach developed by Ante Pulic to determine the IC performance is adduced as one of most prominent tools leveraged by researchers and practitioners. The article seeks to aver that the required data to calculate different constituents of IC have to be obtained from the audited and published annual reports of organisations especially those listed on the stock exchanges.

The VAICTM model provides a robust tool for assessing the efficient use of intellectual capital. The model can be used by management to assess their own organisations’ performance.. Its advantages and disadvantages are listed and possible approach postulated.

The paper analyses research articles from 1997 to 2013 to give a bird's eye-view of VAICTM. Empirical data are not provided here since it seeks to conceptually showcase only the power of the tool.

The application of the VAICTM model presented in this paper provides a basis for practical application for management. The literature survey from scholarly, peer-reviewed, international journals may serve as a useful input for business and industry alike to apply the methodology to address the factors affecting IC performance. This could be done to maximise their value creation. This paper provides information to the stakeholders to assess the value creation IC capabilities of organisations.

The paper is one of the first systematic studies to map the theoretical underpinning of the VAICTM model providing inputs from empirical sources to stakeholders interested in the efficacy of VAICTM.