Sat, Mar 02, 2002 - Page 17 News List

Group lists firms with good futures

INTELLECTUAL CAPITAL Chunghwa Picture Tubes and Trend Micro have the brains to succeed in a knowledge-intensive market, according to III

By ANNABEL LUE  /  STAFF REPORTER

The anti-virus software provider Trend Micro Inc (趨勢科技) and flat-screen maker Chunghwa Picture Tubes Ltd (中華映管) were named two of the most promising IT companies by the government-funded Institute for Information Industry (資策會) yesterday.

Others include network equipment provider Accton Technology Co (智邦科技), computer peripherals equipment supplier Genesys Logic Inc (創惟科技) and software company Springsoft Inc (思源科技), the institute said.

The five ventures were rated valuable in terms of "intellectual capital" and "are expected to grow significantly in next three to five years," said Victor Tsan (詹文男), managing director of the institute's Market Intelligence Center (市場情報中心).

Intellectual capital is comprised of intangible assets including employee knowledge, patents as well as research and development.

The idea was first raised in Newsweek magazine in 1990 and has since been rapidly entering mainstream use as an effective tool to increase corporate competitiveness.

The emerging field of intellectual capital is designed to find a way to identify and measure "the brainpower" hidden in training, documentation, other types of corporate information, and in employees' heads.

Over last decade, an increasing number of consultant companies and accounting firms have regarded intellectual capital as an important part of a venture's assets, said Chang Chao-ching (張朝清), an analyst at the institute.

Another industry watcher said focusing on intellectual capital is very important to Taiwanese industries.

"As many manufacturers have moved to China, Taiwan has to focus on research and development to survive," said Huang Ho-ming (黃河明), the institute's chairman.

"We should upgrade the nation's competitive edge from production to design and innovation," he said.

In addition, companies have to view intellectual capital as a long-term investment.

"Though intellectual capital costs may reduce a company's short-term profit, it will boost its long-term valuation," Huang said.

One Columbia University study estimates that spending on intangible assets such as research and development and employee education results in a return eight times greater than an equal investment in new plants and equipment.

Meanwhile, Tsan said last year's slow economy has impacted the nation's intellectual assets as well.

"According to our report, research and development budgets of the nation's top 100 electronic companies in 2001 were down significantly from 2000," he said.

In addition, Taiwan companies for decades have preferred to spend money on upgrading manufacturing efficiency and marketing, while their investment in human resources management and research is limited, he said.

"But now they can't bury heads in sand any more," Tsan said. "In order to differentiate with other labor-intensive countries, Taiwan has to speed up its conversion into a knowledge-intensive market."

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