Bornemann, M., & Wiedenhofer, R. (2013). Intellectual Capital in Education: A value chain perspective. Intangible Assets consulting
Bornemann and Wiedenhofer (2013) examine the value chain principle, which is a modified version of the supply chain as coined by Michael Porter, to gauge the impact of value chain principles on educational institutions within Austria. The paper examines educational institutions from elementary through higher education and their tie to political/regulatory bodies. Unlike business, educational institutions seem to be far more bogged down in standardization and regulation, losing aspects of the drivers that often help businesses move to the forefront (innovation, creativity, value add and process improvement). With application of certain business principles, Bornemann et al (2013) posit that there are opportunities to build parallels between institutions to find the right set of processes drivers to create success.
What was most interesting in this study is the authors looked at Austrian educational institutions from elementary to higher education as segments of the chain instead of independent of each other. More commonly, authors seem to focus on one level of education instead of across the range which presented interesting perspectives. By examining across the educational chain, there is opportunity to build experiences that, from the earliest educational level, better prepare individuals for success and achievement. Within their interpretation of intellectual capital, Bornemann et al (2013) assert that this is the distinction that sets institutions apart: the individuals we produce are our product and the better that product, the more successful the institution.
The authors made use of 12 case studies collected between 2011-2012 that examined intellectual capital among Austrian schools. Their assertion based on that data is the creation of a value chain of schools with the learner as this developmental “product” that will add new value throughout each educational experience. They align the case studies with data from the auto industry as the supply chain example to prove their assertions. Within this, the authors found areas of similarity and differences and used those to help build connections for their model. Challenges that presented themselves in the research included:
- Definition of individual sets of drivers of Intellectual Capital which are relevant for each individual institution while simultaneously allowing for consolidation into a larger framework.
- Definition of connecting drivers of Intellectual Capital that establish not only relations but support procedural exchange in order to optimize parts and later the whole value chain.
- Definition of an appropriate scale with inter-subjective and auditable measures that support comparability and bench-marking. This, however, is clearly of secondary priority.
The majority of their assertion aligns with the idea that the intellectual capital and relational capital (the relationship building internally and externally that adds or detracts from success) will be part of the differentiator in making the value chain connections work across institutions. How can the relationships between these institutions be connected as they align to processes and outcomes? Again, using the auto industry as the example, the authors assert that the segments with which students move through their education would be similar to the building/production of a car. Building experiences that fit that segment of the “production” before then moving the individual into a connected segment would make up the chain. The focus would not be so industrial, of course, but would instead focus on value add, as part of the value chain and efficiency of costs and services for an optimal experience.
Thinking through the application of this to my own setting of graduate business education, I can see the correlation between this model and the one in the reading. At a smaller scope, I don’t see this as an application across the educational levels but instead more focused on building undergraduate programs that grow into the graduate programs to create a value-add for a student who wants to move from undergraduate to graduate programs. Further, within the graduate programs themselves, taking on the business approach to how the individuals learn as well as interact with services and programs would become a major focus.
Transparency with the students would add some value in building the relational capital in that modelling the processes after business approaches should appeal to the business students going through them. The students should be able to draw parallels between their learning and the ways in which they are receiving services in the hopes that it influences their experience and understanding of their curriculum.
The use of the case studies combined with the examples from the auto industry applied a clear picture and methodology to the reading. Still most interesting is the design of a value chain from elementary through to higher education. A model of that size seems, to me, almost too ambitious but does make sense in the idea of connecting the educational experience from early education to higher education. The ability to align this type of system relates back to some of the challenges presented, specifically the challenge in finding drivers that work within the context of the institution but can then connect to the larger framework. Finding that balance would require institutions with similar approaches and perspectives that could easily align. Where this could most be relevant is the community college level into undergrad and graduate programs. There may even be parallels with high school in that a school, charter or academy, could be aligned to link itself to specific institutions. Pulling this all the way down to the elementary level becomes more challenging. I think the challenge lies in creating a system that can cross borders – do institutions different areas, cities or countries align? Not sure if that is possible within the U.S. educational system but perhaps Austria has the system to support this.
Overall the paper adds value to the idea of the application of value chain to education. Although taken from its own slant as it relates to education in Austria, there are connections between how this can apply to graduate business education and influence a new model based on efficient, value added and customer focused experiences and processes. The addition of intellectual capital as a method of analysis becomes one more way in which the model could take shape within a college of business.