One of the key success factors of every region is an adequate level of intellectual capital provided by the human capital of its residents. This article aims to show that low levels of regional development in Slovenia's least developed region of Pomurje corresponds to the low levels of intellectual capital. The article reviews the literature on the concept and measurement of intellectual capital and provides operationalization of intellectual capital suitable for assessing its levels on a regional, subnational level. The results show that Pomurje has lower level of intellectual capital from the national average. Furthermore, the analysis of rates of growth of intellectual capital indicate the systematic lagging of Pomurje region behind Slovenian average. The case study highlights the problem of brain drain as the key contextual factor that influences the size of intellectual capital and negatively affects the performance of the region thus pointing to priorities of a more effective developmental policy.