National Intellectual Capital in Israel and Financial Crisis Impact

Abstract

This paper expands our previous national intellectual capital (NIC) research and examines the financial crisis impact. Based on ten years of data (2000 to 2009), Israel ranks number 8 among 41 countries. We also calculate the sustaining effect and boosting effect of NIC on GDP growth and GDP growth trend. This paper expands our previous national intellectual capital (NIC) research and examines the financial crisis impact. Based on ten years of data (2000 to 2009), Israel ranks number 8 among 41 countries. We also calculate the sustaining effect and boosting effect of NIC on GDP growth and GDP growth trend. Data analysis reveals that market capital and NIC are the two main factors that helped sustain Israeli GDP growth, whereas human capital and NIC are the two main factors that helped boost its GDP growth trend. However, during the financial crisis years (2007–2009), market capital and process capital together were Israel’s growth drivers. Israel advanced its NIC over the years, yet its financial capital decreased in terms of ranking. That is, the added value of Israeli NIC, particularly its renewal capital can be further enhanced.