Lecture 1

Introduction
Knowledge and Innovation Management

Dr. Dominic Wong

[email protected]
Coursework Marking
Components
• Coursework (50%)
Section One: Individual report (50%)
Section Two: Group written assignment (50%)

• Final examination (50%)

One compulsory case study question (40%)
Answer 3 essay questions, 20 marks/question (60%)
Course Objectives
1. To provide students with a basic understanding of the role of
knowledge and innovation in the economy.
2. To equip students with knowledge and innovation
management functions, skills, and practices.
3. To familiarise students with individual socio-psychological
factors and organisational factors to promote innovation
culture and performance.
Course Learning Outcomes
Upon completion of the course, students should be able to:
1. Explain the nature of knowledge and innovation in the
economy and their impact on economic growth (C5, A2)
2. Know how to collect appropriate (quantitative and
qualitative) data to measure the performance of an
organization in the creation of knowledge for boosting
innovation performance. (C5, A2, P6)
3. Identify the people issues in managing knowledge and
innovation in organisations and propose organisation
structures and processes. (C5, A3)
Data, Information and
Knowledge
Tacit
Truth

Wisdom

Knowledge

Information

Codified
Data
Data
• ‘know (raw) facts or things used as a basis of inference or
reckoning’.
• Not meaningful
• E.g., Year of 2014 Malaysia has 30 millions of population
Information
• Information could be considered as ‘systematically organised
data’ (Meadows 2001).
• To inform, the data needs to be organised.
• Another conception of information is data that are endowed
with meaning, relevance and purpose.
• Information gives shape to the data and makes a difference to
the outlook or insight of the receiver of the data. In this sense,
it is the receiver of the data that determines whether a
message is data or information.
• E.g., Year of 2014 Malaysia has 30 millions of population
Example: Data, Information and
Knowledge
Definition of Knowledge
• In practical sense, knowledge could be considered as
‘actionable information’. –e.g. help us to make decisions
• Knowledge allows us to act more effectively than information
or data and equips us with a greater ability to predict future
outcomes.
Knowledge as an Economic
Goods
• Ability to store, share, and analysis knowledge through
networks and communities using the new ICT technologies
allows firms to exploit the unique properties of knowledge to
gain competitive advantage.
• The value of knowledge to an economy comes from sharing
with others, internally or externally with suppliers and
customers.(i.e. while there maybe no tangible values such as
money involved but knowledge plays a VITAL ROLE in
creation of products and services)
Knowledge as an Economic
Goods
• Intellectual property right – restriction to share knowledge
externally which may benefit potential competitor.
• Therefore IP right have to balance where sufficiently strong to
provide an incentive for firms to invest in innovation product
and processes and yet no so strong they unduly inhibits the
diffusion of knowledge.
Knowledge as an Economic
Goods
• Business organisation restricting their employees through
impose restrictive clauses in their employment contracts
about future employment.
• But knowledge is public goods because its leaks.
The Knowledge Economy
• For several decades the world's best-known forecasters of
societal change have predicted the emergence of a new
economy in which brainpower, not machine power, is the
critical resource. But the future has already turned into the
present, and the era of knowledge has arrived.
--"The Learning Organization," Economist
Intelligence Unit
The Knowledge Economy (KE)
• Definition
• Production and services based on knowledge-intensive
activities that contribute to an accelerated pace of technical and
scientific advance, as well as rapid obsolescence.
• Key component is a greater reliance on intellectual capabilities
than on physical inputs or natural resources.

• What are the examples of KE in Malaysia?

The Knowledge Economy
• Definition (OECD 1996)
• “the role of knowledge as compared with natural resources,
physical capital and low skill labour has taken on greater
importance. Although the pace may differ all OECD economies
are moving towards a knowledge-based economy”

• Watch the video clip. What are the factors for KE?

• *OECD-Organization for Economic Cooperation and

Development 
Key Features of Knowledge Economy and
Knowledge Economy Organisations
• The knowledge economy represents a “soft discontinuity”
from the past – it is not a “new” economy operating to a new
set of economic laws.
• The knowledge economy is present in all sectors of the
economy, not just the knowledge intensive industries.
• The knowledge economy has a high and growing intensity of
ICT usage by well-educated knowledge workers.
Key Features of Knowledge Economy and
Knowledge Economy Organisations
• A growing share of GDP devoted to knowledge intangibles
compared with physical capital.
• The knowledge economy consists of innovating organisations
using new technologies to introduce process, organisational
and presentational innovation.
• Knowledge economy organisations reorganise work to allow
them to handle, store and share information through
knowledge management practices.
Knowledge Intensive Sector
• Intensive users of ICT.
• High shares of highly educated/skilled workforce using the
benefits from technological innovation.
• Cover manufacturing and service industries
• E.g., high tech manufacturing, finance and insurance,
telecommunication, education, health, cultural and creative
industries
Knowledge Jobs and Knowledge Workers
• Definitions
1. All those who work in the top three standard occupational
classifications (managers, professional, associate professional).
2. All those with high levels skills, indicated by degree or
equivalent qualifications.
3. All those who perform tasks that require expert thinking and
complex communication skills with the assistance of
computers.
Most Valuable Skill Sets in term of
Competitive Advantage in 2020 (A)
1. Critical thinking, problem-solving skills, and applied
knowledge for practical results
2. Mastery of rigorous academic content, especially in literacy,
mathematics, and information technologies
3. Innovative and creative thinking, including entrepreneurial
skills
4. Communication skills, both oral and written
Most Valuable Skill Sets in term of
Competitive Advantage in 2020 (B)
5. Team learning and work, relationship building, and
interpersonal social skills
6. Personal responsibility, including good work habits, work
ethic, knowing how to be flexible and continue learning, and
financial literacy
7. Global awareness, languages, and understanding other
cultures (including history, economics and geography)
What is Knowledge
Management?
• Knowledge management (KM) may be defined simply as doing
what is needed to get the most out of knowledge resources.
• KM focuses on organising and making available important
knowledge, wherever and whenever it is needed.
• KM is also related to the concept of intellectual capital.

Another definition
• Knowledge management is about finding, unlocking, sharing,
and altogether capitalizing on the most precious resources of
an organization: people’s expertise, skills, wisdom, and
relationships.
Forces Driving Knowledge Management
• Increasing Domain Complexity
• Intricacy of internal and external processes, the rapid
advancement of technology.
• Accelerating Market Volatility
• The pace of change, or volatility, within each market domain
has increased rapidly in the past decade.
• Intensified Speed of Responsiveness
• The time required to take action based upon subtle changes
with and across domains is decreasing.
• Diminishing Individual Experience
• High employee turnovers rates have resulted in individuals
with decision making authority having less tenure within their
organizations than ever before.
Knowledge Management Enablers
• Leadership
• Knowledge champions, such as CKOs
• Organisation culture such as learning, sharing
• Access
• Technology
Why KM? What’s the Big Deal?
• By instituting a learning organization (KM-intensive), there is
an increase in employee satisfaction due to greater personal
development and empowerment.
• Keeps your employees longer and thereby, reduces the loss of
intellectual capital from people leaving the company.
• Saves money by not reinventing the wheel for each new
project.
Why KM? What’s the Big Deal?
• Reduces costs by decreasing and achieving economies of scale
in obtaining information from external providers.
• Increases productivity by making knowledge available more
quickly and easily.
• Provides workers with a more democratic place to work by
allowing everyone access to knowledge.
In Successful KM Programs
• Information is widely disseminated throughout the
organization. Wherever it is needed, it is accessible.
• Accessible at a fast rate of speed.
• Virtual communities of practice (CoP) share what is known in
a global fashion, independent of time zones and other
geographic limitations.
• Business boundaries are broad, and often virtual in nature.
• Collaboration to support continuous innovation and new
knowledge creation.
KM Challenges
• No internal learning communities
• Lack of psychological safety
• Lack of workplace trust
• Arrogance of people who believe they know everything, so why try?
• Lack of communication within an organization made evident by
continually reinventing the same wheel
• Negativity and unrealistic expectations
Knowledge Management?
• The essence of knowledge management is understanding and
valuing intangible assets over tangible
• Understanding that human and intellectual capital are the
greatest resources
• Managing the skills and competencies that lie within an
organization, and allowing them to blossom
• Allowing people to be the best that they can be; optimizing
performance
Is Knowledge Manageable?
Knowledge itself is not manageable. What is manageable are the processes necessary
to encourage the sharing of knowledge and the development of intellectual
capital assets.

The implementation & management of processes requires a route map that may be
used by all members of the organisation to understand their roles and
responsibilities, their relevance within the organisation, and to access the
knowledge available to carry out those roles.
Where Does Corporate Knowledge Reside?

26% 42% 20% 12%

Paper Employee’s Electronic Electronic

Documents Brains Documents Knowledge Base

Salamander Organization Workforce Survey*