A Knowledge That Matters

Humans are unique creatures in their thinking ability. Of course, the level of utilisation of the brain differs due to socio-cultural, geographical, political and economic differences

In our evolution, knowledge is a pivotal element in all facets of survival. Rightly depicting this is the saying, “knowledge is power”. Without knowledge, there is no production, no direction and no focus of life.

For me, knowledge is a fluid mix of framed experiences, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knower. In organizations, it often becomes embedded not only in documents and repositories but also in organisational routines, processes, practices and norms.

Traditional production functions focus on labour, capital, materials and energy; knowledge and technology are external influences on production. Lately, though, analytical approaches are being developed so that knowledge can be included more directly in production functions.

Investments in knowledge can increase the productive capacity of the other factors of production as well as transform them into new products and processes. And since these knowledge investments are characterised by increasing (rather than decreasing) returns, they are the key to long-term economic growth.

It is not a new idea that knowledge plays an important role in the economy. Adam Smith, the famous economist often considered as the father of the discipline, referred to new layers of specialists who are men of speculation and who make important contributions to the production of economically useful knowledge. Friedrich List also emphasized the infrastructure and institutions that contribute to the development of productive forces through the creation and distribution of knowledge.

But the questions are which knowledge and knowledge from where. The response plays an important role to the economy.

There are relationships between the individual and his social world; that is between the knowing social actor and the social groupings and contexts in which he or she participates and exists, and in which knowledge is socially constructed. This, on a larger scope, portrays that knowledge differs with time, place and organisations. Knowledge is the conversion of sight into perception and from perception to application.

Knowledge management is, then, described as an integrated, systematic approach to identifying, managing and sharing all of an enterprise’s information assets like the databases, documents, policies, procedures and previously unarticulated expertise and experiences from individuals. When it comes to indigenous knowledge systems, it would mean that the common phenomena from the people of certain citizenry must be shared and capitalized among the people to inform decisions that influence productivity.

Indigenous knowledge represents a possible alternative for progress among the world’s rural poor. I argue that the remaking of development must start by examining local constructions, to the extent that they are the life and history of the people, that is, the conditions for and of change. Such approaches can be supported by careful ethnographic work capable of teasing out the complexities of the interrelationships established between communities and places.

A change that comes from within communities themselves brings economic and social progress. There is then a sense of the rural poor having a voice about progress which affects them, and outsiders listening seriously to what the rural poor have to say, learning from them, and respecting their realities and priorities.

Incorporating knowledge into standard economic production functions is not an easy task as this factor defies some fundamental economic principles, such as that of scarcity. Knowledge and information tend to be abundant. What is scarce is the capacity to use them in meaningful ways.

Nor is knowledge easily transformed into the object of standard economic transactions. To buy knowledge and information is difficult because by definition information about the characteristics of what is sold is asymmetrically distributed between the seller and the buyer.

Some kinds of knowledge can be easily reproduced and distributed at low cost to a broad set of users, which tends to undermine private ownership. Other kinds of knowledge cannot be transferred from one organisation to another or between individuals without establishing intricate linkages in terms of network and apprenticeship relationships or investing substantial resources in the codification and transformation into information.

In order to facilitate economic analysis, distinctions can be made between different kinds of knowledge which are important in the knowledge-based economy: know-what, know-why, know-how and know-who. Knowledge is a much broader concept than information, which is generally the “know-what” and “know-why” components of knowledge.

These are also the types of knowledge which come closest to being market commodities or economic resources to be fitted into economic production functions. Other types of knowledge, particularly know-how and knows-who, is more tacit knowledge and are more difficult to codify and measure.

Know-what refers to knowledge about facts. Here, knowledge is close to what is normally called information it can be broken down into bits. In some complex areas, experts must have a lot of this kind of knowledge in order to fulfill their jobs. Practitioners of law and medicine belong to this category.

Know -why refers to scientific knowledge of the principles and laws of nature. This kind of knowledge underlies technological development and product and process advances in most industries.

The production and reproduction of know-why is often organised in specialised organisations, such as research laboratories and universities. To get access to this kind of knowledge, firms have to interact with these organizations either through recruiting scientifically-trained labour or directly through contacts and joint activities.

Know-how refers to skills or the capability to do something. Businessmen judging market prospects for a new product or a personnel manager selecting and training staff have to use their know-how. The same is true for the skilled worker operating complicated machine tools.

Know-how is typically a kind of knowledge developed and kept within the border of an individual firm. One of the most important reasons for the formation of industrial networks is the need for firms to be able to share and combine elements of know-how. This is why know-who becomes increasingly important.

Know-who involves information about who knows what and who knows how to do what. It involves the formation of special social relationships which make it possible to get access to experts and use their knowledge efficiently.

It is significant in economies where skills are widely dispersed because of a highly developed division of labour among organizations and experts. For the modern manager and organisation, it is important to use this kind of knowledge in response to the acceleration in the rate of change. Know-who kind of knowledge is internal to the organization to a higher degree than any other kind of knowledge.

Learning to master the four kinds of knowledge takes place through different channels. While know-what and know-why can be obtained through reading books, attending lectures and accessing databases, the other two kinds of knowledge are rooted primarily in practical experience. Know-how will typically be learned in situations where an apprentice follows a master and relies upon him as the authority.

Know-who is learned in social practice and sometimes in specialized educational environments. It also develops in day-to-day dealings with customers, sub-contractors and independent institutes. One reason why firms engage in basic research is to acquire access to networks of academic experts crucial for their innovative capability. Know-who is socially embedded knowledge which cannot easily be transferred through formal channels of information.

The development of information technology may be regarded as a response to the need for handling the know-what and know-why portions of knowledge more effectively. Conversely, the existence of information technology and communications infrastructures gives a strong impetus to the process of codifying certain types of knowledge.

All knowledge which can be codified and reduced to information can now be transmitted over long distances with very limited costs. It is the increasing codification of some elements of knowledge which have led the current era to be characterized as “the information society” – a society where a majority of workers will soon be producing, handling and distributing information or codified knowledge.

The digital revolution has intensified the move towards knowledge codification and altered the share of codified vs. tacit knowledge in the knowledge stock of the economy. Electronic networks now connect a vast array of public and private information sources, including digitalized reference volumes, books, and scientific journals, libraries of working papers, images, video clips, sound and voice recordings, graphical displays as well as electronic mail. These information resources, connected through various communications networks, represent the components of an emerging, universally accessible digital library.

Due to codification, knowledge is acquiring more of the properties of a commodity. Market transactions are facilitated by codification, and diffusion of knowledge is accelerated. In addition, codification is reducing the importance of additional investments to acquire further knowledge. It is creating bridges between fields and areas of competence and reducing the “dispersion” of knowledge.

I believe these developments promise an acceleration of the rate of growth of stocks of accessible knowledge, with positive implications for sustainable economic growth. They also imply increased change in the knowledge stock due to higher rates of scrapping and obsolescence, which will put greater burdens on the economy’s adjustment abilities.

Published on March 9, 2015 [ Vol 15 ,No 775]



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