Intellectual Capital for Frugal Innovation through Information Technology Capabilities in Malaysian Higher Education Institutions

Higher Educational Institutions (HEIs) is a most important mechanism for socioeconomic development and an important factor of economic mobility in our society. Thus, HEIs are an interesting area of investigation because they are considered critical players in the knowledge-based society. Moreover, HEIs need to play an important role in nurturing high-skill talent the country needs for sustainable economic growth. However, many private HEIs facing poor profitability, increased short term debts with under-resourced cash flow and insufficient fund that could lead to financial insolvency or at a high risk of financial failure. In a firm that cultivate knowledge-intensive activities, the variations in the provision of intellectual capital(IC) determine the efficiency of the processes and the capabilities of the firm to create value. However, it is important to note that the IC value of HEIs has received relatively little attention to date when cost and efficiency performance is debated. Intellectual capital, when referring to a university, covers all the institution's non‐tangible assets, including processes, capacity for innovation, the implicit knowledge of its staffs and their capabilities, patents, talents and skills, the acknowledgment from the community and its external relationship. This research proposes to shed light on the ability of HEIs to formalize, capture, and leverage its intangible assets rather than only investing and managing tangible assets in order to achieve frugal innovation. Frugal Innovation (FI) have been conceptualized under the theory of Resource based view to support firm with resources constraint to create more social and economic value. Accordingly, this conceptual paper seeks to contribute to the current debate in the literature, positioning frugal innovation within the sphere of IC research, through exploring the effect of IC on frugal innovation is mediated through the information technology capability