Managing Intellectual Capital for SMEs’ Sustainable Development. A Conceptual Proposal

Abstract

This article seeks to contribute to the growing body of literature on intellectual capital (IC) and Islamic work ethics (IWE) within small and medium enterprises (SMEs). It aims to explore how socio-economic factors are designed to enhance sustainable development (SD) and generate value. To address the research question, this paper employs a conceptual approach with the goal of achieving a comprehensive understanding of the mechanisms supporting SD in SMEs. It has delved into pivotal existing studies to grasp the foundational roots and dynamics underlying the principles of sustainable development in SMEs. This article illustrates, drawing on prior literature and theoretical considerations, the impact of Ibn Khaldun’s multidisciplinary-dynamic theory of development on IC and IWE within SMES, with the objective of fostering SD. The findings reveal that five socio-economic activities of SMEs form the foundation of the proposed conceptual framework. First, maintaining the well-being of people to develop capabilities and intellect for SME entrepreneurs and stakeholders is intended as human capital (HC). Second, promoting sense of solidarity and group feeling by taking care of their surrounding which is susceptible to development; is reported in the relational capital (RC). Third, advocating justice and primacy of morality is referred to Islamic work ethics (IWE). Fourth, executing the Shariah which guides human beings to what is good in it with regard to the religious and worldly aspects is signified to the spiritual capital (SP). Fifth, distributing resources equally in terms of technological and intellectual enhancements is implied to the organizational capital (OC) and technological capital (TeC). In essence, this paper provides implications for the stream of literature about IC and IWE in SMEs. It investigates five socio-economic activities as the well-being of people (N), sense of solidarity and group feeling in the surrounding (g), justice and primacy of morality (j), execution of the Shariah (S) and equitable distribution of resources (W); that respond to different IC levels elements (human, relational, organizational, spiritual and technological) and IWE. Furthermore, this article presents a conceptual framework that aligns with three core streams in economics and management studies, corresponding to Ibn Khaldun's development theory, IC, and IWE. This framework enhances the conceptualization of managing intellectual capital and Islamic work ethics for SMEs’ sustainable development, surpassing previous studies.     &nbsp