The Correlation between Structural Capital and Innovation in Indonesian Manufacturing Industry

TL;DR

This paper investigates the relationship between structural capital and innovation in Indonesian manufacturing industries using a new index, revealing that the correlation varies with industry size and characteristics.

Contribution

It introduces the ICI index to quantify the role of structural capital in innovation, focusing on its application to Indonesian manufacturing sectors.

Findings

Correlation depends on industry scale and characteristics

ICI index identifies dominant innovation components

Structural capital significantly influences innovation processes

Abstract

The statistical relationship between structural capital and innovation in Indonesian manufacturing industries is presented. The correlation is constructed using recent survey data on the contribution of structural capital to the innovation processes in the industries. The correlation is represented quantitatively using the recently developed Intellectual Capital and Innovation (ICI) index involving all components of intellectual capital and its role to enable innovation in a manufacturing industry. However, the paper is focused only on the contribution of structural capital component. Using the available data it is shown that the correlation is highly depending on the scale and characteristics of each manufacture. It is also argued that the ICI index is able to quantitatively prove the dominant components in innovation processes for each class of manufacturing industries.