Intellectual Capital Strategy in Increasing the Financial Performance and Empowerment of BUM Desa in Indonesia.

Intellectual capital is an intangible asset consisting of knowledge and networks, which are believed to increase economic added value in the business. In the context of the enactment of Undang-Undang No. 6 tahun 2014 concerning villages, BUM Desa has an important role as an economic institution at the village level which is expected to become one of the main pillars of economic development. This study aims to identify and measure the extent to which intellectual capital is present in BUM Desa, and also to analyze the impact of the relationship between this intellectual capital and the financial performance of BUM Desa. The study was carried out by BUM Desa in Tambang District, Riau Province, as a case example. Intellectual capital measurement was carried out through a Likert scale analysis, while financial performance was measured through the ability of BUM Desa to generate profits and control costs. A descriptive approach was used to describe the relationship between intellectual capital and financial performance. The results of the study show that the intellectual capital of BUM Desa is formed from three main dimensions -- structural capital, relational capital, and human capital. BUM Desa is able to generate profits from assets that are more efficient than equity funding and can reduce costs to maximize profits. [ABSTRACT FROM AUTHOR]