Knowledge Importance by José Maria Pedro
Knowledge is a well-known issue today. Countless seminars, conferences, white papers and specialized reviews, books and Internet sites show the importance of this new discipline of management.
It is seen as the enterprise gold. Today, it is not necessary to have high buildings, good cars, information systems, friendly and easy that can process large quantities of raw data, nor have fast communications that allow the information to run across all the organisation properly. First of all, it is necessary to know how to use those resources and get the business opportunities that market offers at the right moment.
We don't know if there are any product with nothing knowledge inside it. Since the beginning of human kind, any tool, even the most simple, always had some feature that come from the human ability to plan and act in order to get a result. According to this way of thinking, Thomas A. Stewart says that knowledge "is the chief ingredient of what we buy and sell, the raw material with witch we work".
When we increase the value of the knowledge we increase the importance of employees. An employee is evaluated more by the results than by quantity of operations he can do or by the time he works with one enterprise. The repeated tasks are now held by machines, agriculture and industrial production released countless employees to new business. Man can now get into new tasks where his intellectual capabilities are most important resources. Attorneys are paid more by results than by the quantity of words they use, it is more important to argue with quality ideas than with many nice words.
Knowledge is a very special factor, the more we use it the more it grows. If you have lots of knowledge then you can get lots of it. Gets old like other resources, but it grows when is used. It is different from a common resource or a machine that disappears when is used. When we invest in professional training for a high potential employee, we are creating conditions to increase our base of growing knowledge because this employee can spread that knowledge inside the enterprise. This kind of investment is different because it leverages other resources in business. It acts like a snow ball, the larger it is the more snow it can get when is rolling out.
The list of authors that writes about knowledge importance in business is long. Ikujiro Nonaka says "in an economy where the only certain thing is uncertainty, the only source of competitive advantages is knowledge". The results of business decision making and action depend on individual knowledge of those who take decisions and act. Being in front, means to identify e select better options, to act with knowledge.
An organization or a country can get and develop competitive advantages if it has the best and qualified people. James Rauch, an economist from California, San Diego, showed that for each additional year of school, productivity increases about 2,8%.
Kevin kelly, one of the known authors says there are three new characteristics in the economy: it is global; It helps intangible goods - ideas, information and interaction; It is intensively interconnected. Such characteristics point undoubtedly to the growing importance of knowledge.
New types of companies are born every day seat almost exclusively in intangible assets. Its products are intangible and can electronically be distributed through the 'space of market' for the Internet. Such ways of distribution and intensive companies in knowledge with digital products are of the third millennium. Annie Brooking relates that the emergent importance of the knowledge capital reflects the increasing dependence of the intangible assets in the recent companies. The world is moving one more time, it is urgent to find new processes to monitor and to manage the organisations that reflect this change.
Laurence Prusak relates, by the way of the alterations that had led to focus the attentions into the knowledge issue, six large modifications with consequences in the increase of the importance of this factor:
"Our accelerating world": the modification rhythm sped up for the markets, technologies, chances, and competition. A fast change of the conditions also means fast obsolescence of the knowledge and the consequent necessity to create new knowledge to innovate, to create and to keep competitive advantage. The challenge rank to the management for this rhythm are raised. The fastest way to change the knowledge is to change the people because these are the real owners of the knowledge. But to make this is a bad decision because these people make have useful knowledge to the company in the future.
"Smart products and service intensity": the nature of the goods and services moved. For a research laboratory, a software or consulting company, the inventory most important is not what shows physical assets, but the one witch identifies the knowledge accumulated. The knowledge relevant comes from many sources: in the head of the people, in the processes adopted, in the relations established between the internal and external people to the company (collaborating, customers and suppliers). Even in the products less intensive in information the component service has come to grow, incorporating more knowledge.
"It’s not a small world after all": the scope of the companies and the market moved, now is wide with the globalisation of the economy. Passed the borders of the countries, physical space passed to a virtual space, the appearance and development of the e-commerce is an evidence of this modification.
"Here today, gone tomorrow": the number and the rotation of the employees had moved. The companies look for to reduce the number of employees and try to keep the level of knowledge in the remainders. This process leads to the necessity of management of knowledge with emphasis for the quality and motivation of the collaborators.
"The coming virtually": the structure of the organisations moved, tends to be virtual. It shows a line up of the companies in direction of the markets, the products and the processes without geographic barriers. The value chain can be developed on the basis of equips dispersed. The complementarity of new comers can easily be taken in a virtual space. The case of the bookstore amazon.com illustrates this new reality.
"Multiplying connections": the potentialities of the information technologies facilitate to formalisation of the management of the knowledge and its spreading. The use of interactive networks obtained with the telecommunications and technologies as GroupWare, can approach the people, putting them in contact. People with high knowledge are thus available for who intend to pick-up their knowledge.
For Lester C. Thurow the knowledge is the new base for the wealth. The control and the property of the knowledge are a great current concern because the management processes differ from the used ones for the physical assets. In the past, this situation never happened, when the capitalists spoke of its wealth, they related to plants and natural features. In the future the capitalists will speak of the control of the knowledge, but of one different way. We can speak of property of equipment, natural plants and features as industrial goods, but we cannot speak of the total property of the knowledge. The possessing human beings of knowledge cannot be transformed into slaves or vulgar stock. The central question in the economy of the future will be to know until what point somebody controls the available knowledge in one given enterprise reality.
The evolution is also designated to the level of the standards of consumption of the consequent modifications in the economic activity. Stan Davis and Christopher Meyer affirm that the economy is the mode as the people use the features to fill its desires that evolve to the long one of history. The way as the economy functions have moved to the long one of history, today depends on three directive forces: speed, connectivity and growth of the intangible value. Speed because each aspect of business and the connected organisation operates and moves in real time; Connectivity because everything is to be connected electronically to everything: products, people, companies, countries, everything; Intangible because any it offers has two components of value, a tangible one and another intangible one. The intangible part is to grow more quickly. It has new signs in the linked economy.
Stan Davis and Christopher Meyer still affirm that the risk levels changed, beyond the changes in the businesses and the market also designated by Prusak. He has three particularly important aspects: First, the information became so rich and easily accessible that the market is strongly efficient. Second, the decrease of the physical value as base of the value underlined the talent and the intellectual capital as the scarcest resource for the wealth creation. Third, the increasing debate on the legislation of copyrights, cryptography and privacy designate the unbundling enter the developed capital in the industrial age and the developed capital in the linked economy. Besides being each more determinative and important in the economic activity, as we saw before, the knowledge is distinguished from a mere resource, it allows to create wealth of the form independently as it exists in the organisations. It is distinguished from the generality of the resources consumed during the production because its use is made throughout all the productive process and it does not estimate its destruction or disappearance with the incorporation in the process. Therefore, it acquires the statute and the form of capital, we start to call it Knowledge Capital.
see models for measuring knowledge capital