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Badilisha Lugha KISWAHILI

Can knowledge management support development?

25th June 2012

According to Wikipedia, ‘knowledge economy’ is a term that refers either to an ‘economy of knowledge’ focused on the production and management in the frame of economic constraints, or to a ‘knowledge-based economy’. In the second meaning, more frequently used, it refers to the use of knowledge technologies (such as knowledge engineering and knowledge management) to produce economic benefits as well as job creation.

Economics of knowledge refers to the concept that supports creation of knowledge by organizational employees which helps and encourages them to transfer and better utilize their knowledge that is in line with company/organization goals.

The essential difference is that in knowledge economy, knowledge is a product, while in a knowledge-based economy, knowledge is a tool. In many literatures this difference is not yet well distinguished. They are both strongly interdisciplinary, involving economists, computer scientists, engineers, mathematicians, librarians, geographers, chemists and physicists, psychologists, sociologists and many more.

Dominique Foray in his book the “Economics of Knowledge” printed in 2004 argues that the economics of knowledge is a rapidly emerging sub discipline of economics that has never before been given the comprehensive and cohesive treatment found in this book. He analyses the deep conceptual and structural transformation of our economic activities that has led to gradual knowledge-intensive activities. According to Foray, this transformation is the result of the collision of a longstanding trend-the expansion of knowledge-based investments and activities-with a technological revolution that radically altered the production and transmission of knowledge and information.

The book further focuses on the dual nature of the economics of knowledge: its emergence as a discipline (which Foray calls “the economics of knowledge”) and the historical development of a particular period in the growth and organization of economic activities (“the knowledge-based economy”)

According to World Bank website, the ability to produce and use knowledge has become a major factor in development. In fact, this ability is critical to a nation’s comparative advantage. Surging demand for secondary education in many parts of the world offers developing countries an invaluable opportunity to prepare a well-trained workforce that can generate growth in a knowledge-driven economy.

Kenan Jarboe and Athena Alliance in their paper titled “knowledge management as an economic development strategy” published in 2001; argue that just as information and knowledge are changing the nature of our economy, they are also changing the practice of local economic development. Companies are changing how they operate and what drives their location decisions. Local economic development must adapt to these changes. In addition, we are gaining a better understanding of how information and knowledge affect both the economy in general and the economic success of specific localities. As a result, there is a rise in new theories of economic development, such as economic clusters, that can be useful in guiding local economic development activities.

According to Jarboe, K et al, the shift to a knowledge/ information-based economy is changing what business needs as inputs to the production process. No longer are business location decisions based simply in the availability of cheap land, cheap energy, a low-cost labor force, availability of raw materials, or access to transportation. The ability of locality to supply a company’s need for information and knowledge assets has become paramount in economic development. There are at least three elements involved in the process: an-up-to-date IT infrastructure, availability of skilled workers and a good quality of life.

Rosabeth Kanter in her book ‘World Class’ observes that in today’s information economy, companies have come to realize that their major business assets are: Concepts ( i.e. ideas, designs etc); competence (i.e. the ability to execute); and connections ( i.e. close relationships that allow for the augmentation of resources and the leveraging of one’s abilities).

One major consulting firm defines five different types of assets that companies can use to create value which are: physical, financial, employee and suppliers, customer, and organizational. Only the first two: physical and financial, include traditional assets. The last three are sources of knowledge and information assets.

Kanter argues that in order to succeed in this new environment, companies have sought ways to tap into that knowledge and information assets. The term ‘Knowledge Management’ or ‘KM’ has emerged to describe these efforts.

Thomas Stewart in his book ‘Intellectual Capital: the New Wealth of Organisation’ defines ‘Knowledge Management’ as a set of techniques, tools and activities focused on helping organizations capture and communicate their “resources, tacit and explicit perspectives and capabilities, data, information, knowledge and may be wisdom”.

It its broad definition, any technique that improves the communication, sharing and/or formal captures of information or knowledge can be a KM tool. The tool can either be IT or organizational. According to Kanter, these tools can perform a number of tasks such as:

(a) enhance external communications of companies including marketing;

(b) promote internal communications within local businesses and help companies capture tacit knowledge;

(c) uncover and develop local intellectual assets, including help develop information products, and help identify entrepreneurial and business opportunities;

(d) help develop local economic clusters;

(e) enhance external knowledge sharing among the economic development community; and

(f) Capture and share tacit knowledge within an economic development organization.

Every community has or can develop some knowledge and skills that are useful in the information age. Capturing and utilizing that local knowledge is the next use of KM tools in economic development.

One example is the World Bank’s Indigenous Knowledge Program. This KM activity is focused on the capturing this indigenous knowledge so that the information can be used to improve development programs. Knowledge of the local situation is critical to the success of a project.

In their report titled ‘Achieving Successful Knowledge Management Initiatives’, Rob van de Spek and Jan Kingman argues that the main keys to successful knowledge management programmes are:

(a) Consistent and clear focus based on company strategies and relevant business drivers;

(b) Effective enables focused on the empowerment of employees;

(c) Effective change management sponsored by top management; and

(d) Effective management of the knowledge management programmes.

A report on ‘A Framework for Evaluating Economic of Knowledge Management Systems’ written by Minsoo Shin observes that organisations are implementing KM systems with the assumption that the result will be an increase in organizational effectiveness, efficiency and competitiveness. Implementing KM systems, however, may be a problem to organizations: too much or too little effort might lead to unwanted outcomes.

Kenan Jarboe and Athena Alliance (2001) concludes that KM can be a powerful tool in economic development, but only if we can harness its power to the unique needs of economic development activities. The use of KM tools in economic development is just emerging. Economic development in the information are requires better use of information and knowledge. It requires unlocking the information and knowledge assets of a community as the driver of local economic development. It also required unlocking the hidden information and knowledge about a community and about the process of economic development. Building a strong local economy means developing and cultivating the local knowledge and information base.


The writer is a specialist in Education Management, Economics of Education, Planning and Policy Studies. He can be reached through +255754 304181 or [email protected] 

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