Introduction  (Page 7/20)

Knowledge types

Knowledge exists in various forms which make it complex and therefore difficult to use in economic analysis. The OECD report ‘ The Knowledge-Based Economy ’ (OECD 1996) describes types as including ‘ Know-what ’, referring to facts, ‘ Know-why ’, relating to knowledge such as scientific principles and laws, ‘ Know-how ’ for knowledge such as skill in using a machine or judging a market and ‘ Know-who ’, in recognition of relationships and access to further knowledge (OECD 1996).

A useful common dichotomy for knowledge types is into ‘ codified ’ and ‘ tacit ’ types. (Lundvall and Johnson 1994). Codified knowledge is that which is recorded onto some form of media and which can be transferred to others for their use. Tacit knowledge exists within people and is regarded as requiring ‘face to face’ interaction between supplier and recipient for its transferral (Boddy 2005). A useful illustration of these knowledge types is provided by the World Bank (World Bank 1999); blueprints of a system are an example of codified knowledge, while the experience of an engineer to find the route of a malfunction demonstrates the importance of tacit knowledge. Information, knowledge and its typologies are studied in detail in the work of Lundvall (Lundvall 1998) who provides a useful explanation of how tacit knowledge arises through;

“ …learning gives rise to know-how, skills and competencies which are often tacit rather than explicit and which cannot easily be transmitted through telecommunications networks. ”

Tacit knowledge itself comprises various elements – namely information, skills, judgement and wisdom (Gorman 2002). These elements can be developed in an individual over decades from unique experiences, including from previous employment (Lawson and Lorenz 1999). Lawson and Lorenz also describe a form of tacit knowledge arising from ‘shared learning’ within an organisation.

By its very nature, tacit knowledge is more difficult to duplicate and is therefore central in holding competitive advantage (Coates and Warwick 1999). Its importance has increased significantly with the advent of ICT. As codified knowledge can be disseminated at ever-increasing speeds its exclusivity is easily lost beyond a region. Meanwhile the tacit knowledge, which does not so easily diffuse, can provide competitive advantage to those who have access to it; i.e., those nearby. The idea is captured by Asheim and Isaken (2002) in terms of ‘ Local ‘Sticky’ and ‘Global Ubiquitous’ . This is an underlying principle that supports knowledge spillovers and the development of clusters .

The knowledge economy / knowledge-based economy

The term knowledge-based economy stems from ‘the fuller recognition of the role of knowledge and technology in economic growth’ (OECD 1996). The role of knowledge in the economy is embraced in a wide set of concepts including the ‘ knowledge-driven economy ’, ‘ knowledge-based society ’, ‘ the new economy ’, the ‘ weightless economy ’ and the ‘ learning economy ’ (Boddy 2005). Although each of these concepts has been developed by authors examining different perspectives of economics they may be treated as synonymous.