Intellectual Capital Disclosure and Information Systems, Smart Technologies and Digitalization

The purpose of this chapter is to analyse the relationship between Intellectual Capital (IC), Smart Technologies and Digitalization. In particular, if we consider the information system process, composed of data collection and storage, data modelling and analysis, and communication, we decided to analyse the last phase of this process, focusing on Intellectual Capital Disclosure (ICD). Since the late 90’s, a number of influential articles and reports have considered the impact of developments in Information and Communications Technologies (ICTs) on corporate disclosure, highlighting how these developments have changed the ways that companies relate to their shareholders (Beattie and Pratt, 2003). Furthermore, many authors (e.g. Striukova et al., 2008; Dumay and Tull, 2007) encourage the use of specific corporate reporting channels different from annual reports, which companies could exploit to disclose better IC information. The new view of the emerging innovations in ICTs is called the “digital reporting era” and it is changing the ways in which companies relate to their stakeholders (Ghani et al., 2009; Hoffman and Mora Rodríguez, 2013). Digitalization and smart technologies have affected internal communication as well as the external ones, and can blur the borders between organizations and ecosystems, acting as facilitator/catalyst of the IC research fourth stage. Corporate communication can be considered part of governance systems and deals with all communication activities of internal and external coordination as well as interest pronouncement for stakeholders (Hauer et al., 2018). To understand the importance of improving ICD through digitalization and smart technologies, it is necessary to realize that the 21st century society is a mass data community for which information is the most valuable asset and fundamental determinant for action (Kuś and Pypłacz, 2019). Having information extends access to other resources and allows companies and their stakeholders to take action to improve the current state. However, organisations appear reluctant to voluntarily disclose their valuable IC because they are not aware of how to gather data and report them (Schaper et al., 2017) and they do itonly if required by their regulatory context (Dumay and Tull, 2007). As stated by many authors, “using technology can facilitate such a shift” (La Torre et al., 2018). According to Bonsón and Escobar (2006), the variables affecting the spread of companies’ voluntary disclosure by the internet are: having been audited by one of the Big Four accountancy firms; the company's activity being in the financial sector; company size. Recent studies reveal how it seems to be relevant to continue to investigate the digital era effects on ICD, as well as its contribution to reveal new approaches and opportunities for disclosing IC strategies and outcomes (Cuozzo et al., 2017). The lack of an established academic background on this specific subject represents our main research motivation and highlights opportunities for theoretical and practical contributions. Therefore, starting from these considerations, we perceived a need for an analysis of the potential role of digitalization in driving ICD. This theoretical gap inspired us the following research questions: How could digitalization become an avenue for ICD and enhance it? What enablers and obstacles arise from digitalization and are the most prominent in driving ICD? Our study has an exploratory purpose, with the twofold objective of: (1) clarifying the relationship between Smart Technologies, Digitalization and ICD and (2) exploring the potential of technology to improve ICD through a preliminary systematization based on literature. Previous research questions leaded our research process towards the development of a preliminary framework on enablers and obstacles of digitalization on ICD, which considers internal and external stakeholders. In doing so, we aim to provide a better understanding of the use of digital channels and tools in ICD processes and their effects on information flows from and to the organizations. The research is based on a qualitative approach. We conducted a preliminary literature analysis in order to achieve our objectives. In accordance with our research proposition, we outline a framework to systematize and describe enablers and obstacles arising from digitalization in ICD. The chapter is structured as follows. The following section is devoted to the review of the literature on the enablers and obstacles arising from digitalization and smart technologies for external and internal stakeholders. Section 3 presents our framework. Finally, the last section discusses our theoretical and practical contributions, together with the limitations and future opportunities of research.