KNOWLEDGE

ECONOMY
CHAPTER 5

DR.SAGAR G
GUEST FACULTY CBSMS
KNOWLEDGE ECONOMY

Definition
The knowledge economy (or the knowledge-based economy) is the use of knowledge to
create goods and services. In particular, it refers to a high portion of skilled workers in the
economy of a locality, country, or the world, and the idea that most jobs require
specialized skills. In particular, the main personal capital of knowledge workers is
knowledge, and many knowledge worker jobs require much thinking and manipulating
information as opposed to moving or crafting physical objects
THE WORLD BANK DEFINITION

• The World Bank defines knowledge economies according to four pillars:

• Institutional structures that provide incentives for entrepreneurship and the use of
knowledge
• Availability of skilled labor and a good education system
• Access to information and communication technology (ICT) infrastructures
• A vibrant innovation landscape that includes academia, the private sector, and civil society
TYPES OF KNOWLEDGE
A Posteriori Knowledge

• A Posteriori knowledge is knowledge that we get directly from our own personal experiences.

A Priori Knowledge

• A Priori knowledge is the opposite of posteriori knowledge. It is knowledge and facts that exist without the need to experience it.

Dispersed or Distributed Knowledge

• Dispersed knowledge is knowledge that no single person has the capacity to see in its entirety. The knowledge is dispersed or spread out among
many different people

Domain or Expert Knowledge

• Domain knowledge is deep knowledge about a particular domain or discipline. We might also call it expert knowledge

Empirical Knowledge

• Empirical knowledge is knowledge obtained through the senses. It is distinct from A Posteriori knowledge because empirical knowledge must be
experienced through the senses alone.
TYPES OF KNOWLEDGE
Encoded Knowledge

• Encoded knowledge is knowledge that has been recorded in symbolic codes.

Tacit Knowledge

• Tacit knowledge is knowledge that you have but cannot express. A person with tacit knowledge has usually had that knowledge for so long that they cannot remember how they
learned it or why it is true

Explicit Knowledge

• Explicit knowledge is the opposite of tacit knowledge. It is knowledge that can be easily explained to outsiders. It is knowledge that we could quickly codify into words and
express to others

Metaknowledge

• Metaknowledge is knowledge about knowledge. Anything we know about knowledge (such as how it works, how to classify it, how we lose it, how to gain it) is
considered metaknowledge.

Imperative (or Procedural) Knowledge

• Imperative knowledge is ‘knowing how’. It is knowledge about how to carry out tasks effectively
TYPES OF KNOWLEDGE

Descriptive Knowledge

• Also known as propositional knowledge, descriptive knowledge is ‘knowing that’ something is true (as opposed to ‘knowing how’ something should be done).
Descriptive knowledge can be learned through memorization and does not require significant practical experience in the field

Situated Knowledge

• Situated knowledge is knowledge that emerges out of a specific context, community or culture. It is knowledge that is specific to that situation and is hard to
understand from outside of that perspective

Known Unknowns

• When we have ‘known unknowns’, we are aware that there’s something that we don’t know or understand

Unknown Unknowns.

• Unknown unknowns are pieces of knowledge that we do not have and equally are unaware that we don’t have it
KNOWLEDGE CENTRIC ORGANIZATIONS

• Any organization whose knowledge focus is to provide mechanisms for building the
knowledge base of the firm to better apply, share, and manage knowledge resources
across various components in the company.
KNOWLEDGE MANAGEMENT FRAMEWORK
KNOWLEDGE CREATION AND CAPTURE

• Knowledge Creation
• The ability to create new knowledge is often at the heart of the organization's
competitive advantage.
• To enable and encourage knowledge sharing
• To create a suitable work environment
• To provide systems that support the work process
• To provide knowledge workers with timely, relevant information and data
DESIGNING OF KNOWLEDGE MANAGEMENT STRATEGY

A good, clear KM strategy can help to:

• increase awareness and understanding of KM in your organisation
• articulate the business case and identify potential benefits
• gain senior management commitment
• attract resources for implementation
• communicate good KM practice
• give a clear, communicable plan about where you are now, where you want to go, and how to plan to get
there
• give you a basis against which to measure your progress,
 CAPTURE & GOVERN KNOWLEDGE

• Remember everything you learned from thinking about your culture, and align your technology to your
culture (not the other way around).
• Work with your team to establish a single, centralized location for mission-critical knowledge. This may
mean migrating away from other tools, or aligning distinct tools with distinct purposes. Document and
communicate decisions widely and often.
• Consider what templates, guidelines, training, and support your team needs to be successful in their
knowledge sharing efforts. Listen for pain points – and seek them out proactively.
• Remember that governance isn’t achieved overnight.Your team may share information to the “wrong”
places for months. That’s okay. Encourage them to re-share the information in your centralized location.
After awhile, it will become habit (and they won’t want to keep sharing things twice!).
ISSUES AND CHALLENGES IN KNOWLEDGE
MANAGEMENT
1. Getting and Keeping People Motivated

2. Keeping up with Ever-Changing Technology

3. Measuring Knowledge Contribution

4. Security

5. Keeping Shared Information up to Date and Accurate

6. Interpreting Data Effectively

7. Ensuring Relevancy

8. Rewarding Active Users

9. Determining Who Will Be Responsible for Managing Your Knowledge

10. Overcoming Shared Leadership

11. Turnover
IMPLEMENTING KNOWLEDGE MANAGEMENT
STRATEGY
• STEP 1: IDENTIFYING THE BUSINESS PROBLEM..
• STEP 2: PREPARING FOR CHANGE
• STEP 3: CREATING THE TEAM
• STEP 4: PERFORMING THE KNOWLEDGE AUDIT
• STEP 5: DEFINING KEY FEATURES
• STEP 6: BUILDING BLOCKS FOR KNOWLEDGE MANAGEMENT
• STEP 7: LINKING KNOWLEDGE TO PEOPLE
 KNOWLEDGE MANAGEMENT AUDIT

 5 activities of Information Resources Management (Willard – 1993) ;

 Identification: What information is there? How is it identified and coded?
 Ownership: Who is responsible for different information entities & coordination?
 Cost and Value: What is a basic model for making judgments on purchase and use?
 Development: How can we increase the value of information or stimulate demand?
 Exploitation: What is the best way to proactively maximize the value for money?
KNOWLEDGE MANAGEMENT AUDIT

 The knowledge audit provides an evidence-based assessment of where the organisation

needs to focus its knowledge management efforts.
 It can reveal the organization‘s knowledge management needs, strengths, weaknesses,
opportunities, threats and risks.
 If properly done, it would provide accurate identification, quantification, measurement and
assessment of the sum total of tacit and explicit knowledge in the organization
KNOWLEDGE MANAGEMENT METRICS

 Intellectual assets are intellectual materials that have been formalized,

captured, and leveraged to produce higher value for the firm
 Intellectual asset classified as ;
 Body of tacit and explicit knowledge about a task, person, or
• organization.
 The capital resources (human, structural, and relational) that augment
this body of knowledge.
KNOWLEDGE MANAGEMENT METRICS

 Organization can take inventories of the IC/IA, or even sell them (training, consultancies)
 Example of Intellectual Assets inventories ;
 Product formula
 Business plan
 Marketing strategies
 Vendor terms
 Employee lists
 Product composition
 New services process
 SWOT analysis
 BENCHMARKING

 Cooperative benchmarking
 the measurement of key production functions of inputs, outputs, and outcomes with the aim
of improving them.
 Performed with the assistance of the entity being studied (the benchmark ―partner‖).
 The entity selected as a benchmark must be the one that has
• ―bestpractices‖ in the area of interest or has won a major national or international quality award.
 Collaborative benchmarking
 Both entities study each other and work together to improve.
 Competitive benchmarking
 The study and measurement of a competitor without its cooperation for the purposes of
process or product quality improvement.
BENCHMARKING

 Overall productivity of knowledge investments.

 Service quality.
 Customer satisfaction and the operational level of customer service.
 Time to market in relation to other competitors.
 Costs, profits, and margins.
 Distribution.
 Relationships and relationship management.