Capitalizing on knowledge

The first focus of many knowledge initiatives in organizations is one of identifying and sharing existing knowledge more widely: "if only we knew what we know". Better management of this knowledge is used to improve business processes, increase productivity, reduce new product development times and achieve many other benefits. Beyond these initial benefits, organizations then turn to ways in which knowledge management can be used to improve their external performance.

While many companies, particularly pharmaceutical firms and management consultancies, have an established track record in generating revenues from their knowledge, many others give scant (rare) attention to identifying their knowledge assets and assessing their marketability. One company that has gone further than most is Skandia. Since 1994 it has routinely measured and reported its intellectual capital, which includes knowledge assets. An organization does not have to embark(participate) on such a measurement system to capitalize on its knowledge, but it is missing an opportunity if it does not explicitly address external knowledge exploitation as part of its business strategy. Much internally generated knowledge is applicable externally and can be converted into viable knowledge-based products and services. This process of commercializing knowledge is the first major theme of "Capitalizing on knowledge" .

As in many other types of business, the Internet offers many advantages for a knowledge business. It reduces transaction costs, extends market reach and allows round-the-clock trading. For products and services which are digitized, immediate electronic delivery can also take place. Most organizations are becoming e-businesses to a greater or lesser extent. An e-business is one where the majority of activities are carried out online, most using the Internet and Internet-related technology. The Internet is a hotbed of innovation. Many new e-business models are continually being introduced. Some, like business-to-business marketing and auctions, have parallels in traditional commerce. For these, the Internet significantly extends functionality and market scope. Other innovations, like business-to-business exchanges, online communities, electronic marketplaces and dynamic pricing, are impractical or not cost-effective using traditional media. The impact of the Internet and how to harness it effectively is the second major theme of "Capitalizing on knowledge".

By combining the potential of the Internet with an explicit approach to commercializing its knowledge, virtually every organization can create k-business opportunities. It may sell its knowledge directly as in business-to-consumer or business-to-business marketing. On the other hand, new kinds of knowledge trading facilities are emerging, such as knowledge markets, online advice networks, knowledge auctions and other similar initiatives. Not all are successful. A pioneering knowledge market, iqport.com, abandoned full commercialization after its market trial. As other dot.com companies have learned to their cost, the road to Internet riches is not always paved with gold. The book " Capitalizing on Knowledge From e-business to k-business" goes beyond the dot.com marketing hype and takes a critical look at how the Internet can be used as a vehicle for creating and sustaining a successful k-business.

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Prof David J. Skyrme

Source: Capitalizing on Knowledge From e-business to k-business