The production and use of knowledge

Citation

Clarke, T. (2001), "The production and use of knowledge", Education + Training, Vol. 43 No. 4/5. https://doi.org/10.1108/et.2001.00443daa.001

The production and use of knowledge

The production and use of knowledge

The OECD in 1996 recognised the growing significance of the knowledge-based economy defined as one "directly based on the production, distribution and use of knowledge and information" (OECD, 1996, p. 2) This theme has rapidly been taken up by national governments as they realised the choice was either a national economy based on knowledge, technology, innovation and high value added, or an economy based on the competition of standardised commodities, low skills and poor wages. In the knowledge economy the basis of competitive advantage is the effective utilisation of knowledge resources. As the market value of companies' intangible assets has come to far exceed the value attributed to physical assets, corporations also have eagerly identified with becoming more knowledge based in their people, products, services and markets.

Globalisation, accelerated technological change, shorter product life-cycles, and mass customisation are driving the competitive pace of innovation and networking. It is in the fusion of the emerging digital networks and the rapidly developing knowledge tools and systems that the business knowledge revolution is being created. The immediate practical reason why knowledge management has risen to the top of the business agenda is not hard to ascertain: IBM estimates the amount of corporate data in the world doubles every 12 to 18 months and that only 15 per cent of this is structured data, and the rest is simply digitised and stored (Knowledge Business, 2000). Over three hundred million people now use the Internet, compared to three million in 1994. They can access more than a billion Web pages, with an estimated three million new pages added every day (US Department of Commerce, 2000). As the OECD perceptively comments, "knowledge and information tend to be abundant; what is scarce is the capacity to use them in meaningful ways" (OECD, 1996, p. 11).

As Figure 1 illustrates, the exponential increase in the production of data, information and knowledge and the increasing use of information and knowledge in business activity has created information overload with a rapid increase in the rate of obsolescence of data and information. There is a growing demand for easier and quicker access to relevant data and information, intelligently structured in ways that enable rapid knowledge acquisition and use.

Figure 1 What is driving knowledge management

Knowledge management initiatives need to be closely integrated with business strategy, identifying and remedying critical knowledge gaps. The strategic business drivers of knowledge management concern how to protect and develop the intellectual capital of the company, how to improve performance, and promote continual learning and innovation. Knowledge initiatives should support and enhance the core competencies of the organisation.

The corporate interest in knowledge management has been fuelled by the remarkable increase in the market valuation of intellectual capital. In this context it is assumed the purpose of knowledge management is to create the conditions in which people may integrate specialist knowledge to produce goods and services of increasingly higher value. Implicit in this is the belief that knowledge can be stored, measured and moved around the enterprise. But most knowledge is tacit, and new knowledge is continually generated by individuals and groups.

The reciprocity and trust required to generate the flow of knowledge requires recognition, encouragement and reward. Knowledge only reaches its full potential to create economic value when it becomes embedded in organisational routines and processes. Companies tend to invest in technology rather than attempting the organisational and cultural change needed to promote knowledge transmission and circulation. Information technology may be a necessary condition, but it is not a sufficient condition for knowledge management, as one authority put it, "knowledge is a difficult thing to shrink-wrap".

Learning organisations in a learning economy

Indicators measuring comparative performance in terms of investing in knowledge-based activities are increasingly used by OECD countries, including:

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  knowledge inputs and outputs (R&D investment; patents; and trade balances in technology);

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  knowledge diffusion (knowledge diffused into production processes, technical expertise, or information and communication technologies);

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  knowledge networks (knowledge distributed among and between universities, public research institutions and industry);

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  human capital (the development of knowledge, skills and competencies in people relevant to economic activity).

The increasing significance of the effective use of knowledge in business activity depends upon dissolving the boundaries between working and learning. A learning economy has been defined as possessing the following characteristics:

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  highly knowledge intensive;

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  rapid diffusion of information;

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  extensive innovation networks;

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  flexible and adaptive to new market opportunities;

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  high levels of education, skill and training;

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  firms' linkages across complementary assets and competencies (Marceau et al. 1997, p. 8)

Developing skills of knowledge acquisition and knowledge management are integral to building a knowledge economy. "Skills essential for creating and sustaining a knowledge culture – a culture where knowledge and information are valued and where knowledge creation, sharing and utilisation are a natural and instinctive part of business processes" (TFPL, 1999, p. 9).

Clearly, critical to the task of developing a learning economy is greater investment in universal, continuous and flexible forms of education and training.

E-learning

A parallel and closely related development to the sudden interest in knowledge management is the emergence of e-learning. The demand for flexible access to lifelong learning and the need to overcome skills gaps with rapidly changing technologies and processes has stimulated the increasing application of computer and communications systems to the delivery of education and training. As Figure 2 illustrates, advances in digital technologies are enabling the creative use of interactive, media rich content that is transcending some of the problems traditionally associated with distance learning.

Figure 2 What is driving e-learning

The rapid growth of e-learning products and services, and the formation of powerful strategic alliances between leading universities, information technology companies, and e-learning companies with the investment of substantial amounts of money in the development of content and delivery systems suggests that e-learning will become central to the knowledge economy.

However, it is necessary to dispel two connected persuasive myths that are both misleading and damaging:

1. 1.

   The myth that e-learning represents a more cost effective mode of training and education. As the articles in this special issue indicate, if done properly, with a concern for appropriate standards of education and training, student experience and outcomes, e-learning involves at least as much, if not more financial investment, than conventional modes of education and training. What then is the benefit of e-learning? The advantages of e-learning are access, flexibility, and the extent to which students can determine their own progress.

2. 2.

   The myth that e-learning implies the obsolescence of universities and training colleges. Though it is a tempting prospect for cash-strapped governments facing the prospect of funding universal, life-long education and training, e-learning does not represent a cheap alternative, which makes traditional education and training investment redundant. The irony of governments pushing universities to become more like businesses is that as rapidly as they are able, businesses are becoming more like universities. That is universities and colleges in the knowledge-based economy have an even more important role in the knowledge-based economy, engaging in the production, transmission and use of knowledge which has been at the core of their existence since their inception. The existence of universities and colleges will remain vital to providing the most fulfilling forms of educational and training experience, but also for developing the technology and content of the e-learning industry.

As Figure 3 illustrates, a new world of learning is opening up in the knowledge economy of computer-based learning, online learning, e-learning, and distance learning. But this is simply part of the multiple modes of learning that will be increasingly necessary as education and training becomes part of the lifelong experience of people working in knowledge based enterprises.

Figure 3 Subsets of distance learning

The e-learning world will rapidly develop because of the huge commercial potential involved. However, as this special issue on knowledge management and e-learning was going to press, the Massachusetts Institute of Technology announced that it intends to make the educational materials for nearly all of its courses freely available on the Internet over the next ten years. MIT OpenCourseWare represents a stunning initiative that could influence other universities and companies to make similar commitments. As the president of MIT, Charles M. Vest, maintained:

OpenCourseWare looks counter-intuitive in a market driven world. It goes against the grain of current material values. But it really is consistent with what I believe is the best about MIT. It is innovative. It expresses our belief in the way education can be advanced – by constantly widening access to information and by inspiring others to participate. Simply put, OpenCourseWare is a natural marriage of American higher education and the capabilities of the World Wide Web. OpenCourseWare combines two things: the traditional openness and outreach and democratizing influence of American education and the ability of the Web to make vast amounts of information instantly available (MIT, 2001).

Interestingly, President Vest believes that OpenCourseWare, rather than damaging enrolments to MIT, will provide a world-wide window on the quality of an MIT education, making "it possible for faculty here and elsewhere to concentrate even more on the actual process of teaching, on the interactions between faculty and students that are the core of real learning" (MIT, 2001).

Thomas ClarkeProfessor of Management and Head of School of Management, University of Technology, Sydney, Australia

References

KnowledgeBusiness (2000), KM Resource Guide, http://www.knowledgebusiness.com/resource/news_all_public.aspMarceau, J., Manley, K. and Sicklen, D. (1997), The High Road or the Low Road? Alternatives for Australia's Future, Australian Business Foundation, Sydney.MIT (2001), http://web.mit.edu/newsoffice/nr/2001/ocw.htmlOECD (1996), The Knowledge-Based Economy, OECD, Paris.TFPL (1999), Skills for Knowledge Management: Building A Knowledge Economy, TFPL, London.US Department of Commerce (2000), Digital Economy 2000, US Department of Commerce,Washington, DC, pp. 1-84.