How knowledge management can support a knowledge economy

A knowledge economy is one where  knowledge resources such as know-how and expertise are as critical as other economic resources. It is seen as an alternative to a manufacturing economy, or an industrial economy. A British definition is that a Knowledge Economy is “where distinctive know-how is vital to competitive services and products”.

According to the World Bank, a country needs four “pillars” to compete in the knowledge economy:

1.  an educated and skilled population
2. information technology infrastructure 
3. a regime that encourages technology and entrepreneurship
4. a tightly knit network of public and private research organisations (“innovation system”

Do you see the missing 5th pillar? The 5th pillar is Knowledge Management.

A key concept of the knowledge economy is that knowledge can be treated as both a business product, and a productive asset. For a knowledge economy to work, this productive asset needs to be treated carefully, nurtured and grown. In other words the Knowledge needs to be Managed.

Yet few governments seem to have grasped this fact; the Gulf states being notable exceptions. Even the World Bank does not seem to see KM as the 5th pillar, and a search of their flagship publication finds no mention of KM, other than as a tag for the book. They seem not to realise that if an economy is to be based on an asset, then the role of the government is to ensure that asset is well managed. They see knowledge as an issue for individuals rather than for organisations; to be managed by training individuals rather than by enabling organisations to learn.

The role of KM

There is definitely a role for Knowledge Managementin the knowledge economy, and one which government can and should promote. At Knoco, we see the government has doing 4 things to promote KM in service of the knowledge economy.

1. The government educates. In every resource-based economy (with the current exception of the knowledge economy) the government plays a key role in educating the key players in how to manage the key resource on behalf of the economy as a whole. Whether this is managing land, managing fish stocks, managing forests or hotels or seaside towns, the government understands that good management is key to a healthy economy, and so provides awareness, training and skills development. This is not yet the case with the knowledge economy, as the government does not yet seem to fully grasp good knowledge management and how it protects the knowledge resource.

 

2. The government sets standards. Today, in every economy (with the exception of the knowledge economy) the government sets standards; marketing standards and labelling requirements for fisheries, standards for agricultural produce and organic farming, star ratings for hotels and “standards for responsible tourism”. If a government wants a thriving knowledge economy, then this is exactly what they need to develop, and here ISO 30401:2018 may be a help.

 

3. The government offers tax breaks and incentives. For example, agricultural fuel (“red diesel”) is free from tax. Governments can financially incentive the tourism sector through low-interest loans, or provide free advertising, and can provide grants for forestry management programs. They do not yet provide incentives for KM development. They could  do this if they chose – they could provide tax breaks for investment in KM technology (so long as this doesn’t lead people to think that technology is all you need), or even better could provide grants for the development of KM strategies.

 

4. The government provides specialist advisors.  Fisheries management advisors, regional tourism advisors, “Farming Advice Service” accredited advisors and so on. Where are the Knowledge Management advisors? There aren’t any, because governments generally do not yet understand knowledge management, and do not yet understand the key message, highlighted above and repeated here – Where an economy is based upon a resource (in this case, knowledge), the government should play a key role in ensuring that resource is well managed, in order to generate value for the economy.