Knowledge managament and innovation (Jul. 19)

Innovation is a generic and sometimes confusing concept. There may be industrial, social, cultural, incremental, radical as well as being the result of an explicit aim (such as in R&D) or an emergent (sometimes unexpected) result of a learning process. Some place the weight of innovation on the fact that the new product or service is actually introduced successfully into the market, as opposed to just a new idea that is never marketed. Some emphasize the novelty behind an innovation, while others admit knowledge or technology transfer as a potential source of innovation. For example, the same product or service may be introduced into a new context or market implying a new innovation (since there is no guarantee that it will have the same success it has had elsewhere). In any case, the role of knowledge and knowledge management as pillars of innovation is long recognized and empirically demonstrated.

With respect to the modes of learning and innovation, Jensen et al. (2007) make a distinction between the Science, Technology and Innovation, or STI-mode, and the Doing, Using and Interacting, or DUI-mode. STI is borne out of formal, science and technology-based codified knowledge, emphasizing so-called know-why type of knowledge. In addition, STI usually implies a formal documentation of the whole learning and innovation process, which often results in the generation of new global knowledge, despite having a local, problem-based origin. Because it is formal, STI has widely used (standardized) measures for assessing its presence and strength in firms (e.g. investment in R&D, scientifically trained personnel, cooperation with universities or research centers). DUI, on the other hand is much less formal and is akin to organizational learning in that it stems from experience-based relational learning. as such, DUI focuses on know-how and know-who types of knowledge and is made possible in flexible organizations that foster knowledge sharing especially across disciplines and organizational units. While the presence of either STI or DUI enable a firm to be more innovative, it is a combination of both which is usually behind firms that excel in innovation. as a consequence, knowledge management may be used to propel the integration between STI and DUI-modes by enabling shared access to codified knowledge, as well as supporting knowledge-based interaction within the firm and across its boundaries (clients, partners, market in general).

The role of knowledge management for innovation is not new, but the focus has shifted as organizations move towards a service-based paradigm, as argued by Darroch (2005). Rather than seeing resources as the main assets of the organization, the key are the services those resources actually deliver. And in order for a resource to deliver a service, it must be coupled to a capability (skills or experience which enable exploiting a particular resource). Seen this way, knowledge is a resource and knowledge management is a coordination mechanism which supports its transformation into a capability, specifically the capability to innovate. A study of New Zealand firms shows that this is the case for all three phases of knowledge management. Acquisition, Dissemination and Responsiveness to Knowledge all contribute to innovation (or rather, innovative firms usually support these three KM functions).