Assignments by Iana Zborshchyk

Iana Zborshchyk, group 13

Contrast and Comparing paragraph
In the second part of 20 century, the society entered into the new paradigm of economics development. Like an old economic theory, the new one is also focused on economics growth and factors that can have influence on it. Supporters of neoclassicism argue that capital accumulation and labor force improvement are the main reasons of economics growth. In contrast, Romer (1986) and Luxas (1988) created the theory that claims that an accumulation of knowledge in the society is the main reason of nation prosperity. The old one theory includes process improvement but interprets it like exogenous variable. On the other hand, the new economics theory states that process improvement is endogenous variable and people can effect on it by increasing in knowledge that is possessed by society. Therefore, the new one theory did not change the key issues of economic development, but it shows us a new important factor that influences it.

Argumentation paragraph
Because today economic growth is increasingly knowledge driven, some top-managers, accountants and scientist have identified an urgent need to measure the intellectual capital and include the results in financials reports of companies. A study made by the Brookings Institution on the value of non-financial companies showed that in 1978 twenty percent of corporate value was attributable to intangible assets, whereas in 1998 this had increased to eighty percent. Nevertheless, it should be admitted that no one has yet questioned how much costs companies creating, collecting and analyzing intellectual capital asset data. Some researches argue whether it is beneficial for company to make such an analysis. However, the cost-benefit analysis shows that measurement of intellectual capital is profitable for company. It can be a source of competitive advantage for enterprise, shows investors the company prospects, and stimulate innovation that leads to wealth generation. Therefore, if company thinks about future and wants to be competitive and prosperous in future, it should measure intellectual capital.