Renewal capital matters: Comparison between Lithuania and Taiwan

Abstract

 In a hyper-competition era with the shadows by COVID-19 pandemic, nations as well as companies are competing for talents, high-technologies and innovations to sustain the economic performance and competitiveness. This study compares the NIC of two small economies, Lithuania and Taiwan, that both perform better than most countries during the pandemic, aiming to understand their next steps to sustain the successfulness after the pandemic. The study utilized the ELSS (Edvinsson, Lin, Stahle and Stahle) model (Stahle et al., 2015) with 48 indicators collected from the World Competitiveness Yearbook to measure the degree of NIC. Based on 20 years (2001-2020) national intellectual capital (NIC) panel data, the descriptive analysis reveals that Lithuania lags behind Taiwan renewal capital. However, Lithuania’s market capital and process capital have great improvement over the past 20 years and are catching up with those of Taiwan. The renewal capital mainly consists of R&D spending/GDP, business R&D spending, cooperation between corporations and universities, venture capital, entrepreneurship, development and application of technology and 6 other renewal relevant indicators. From the perspective of NIC, the gap of GDP per capita between Lithuania and Taiwan corresponds to the difference of renewal capital between these two countries. The results show the significance of renewal capital. Those who are unable to attract, retain talents and slow in technology renewal will not be competitive and sustainable. We suggest that Lithuania utilize its short-term NIC to boost up economic development, then invest more in talent development and technology advancement to ensure its sustainability.