Knowledge management intro class


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Introductory class of the course Knowledge Management - 2014 Roma Tre University Department of Business Studies

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Knowledge management intro class

  1. 1. Knowledge Management Prof. Lucia Marchegiani Roma Tre University
  3. 3. • Industrial capitalism  Cultural capitalism • New renaissance: man&technology at the core • Innovation and creativity: reinventing goods and services, new businesses Knowledge Management 2014 • Informatics boom  Heavy impacts on society and individual lives besides economics • PC and mobile devices serve multiple purposes: typewriters, archives, libraries, post offices, banks, supermarkets, newspapers, weather forecasting, TV, cinemas, games, financial markets, videoconferences…. • Technologies that drive information and knowledge are at the roots of values: Lucia Marchegiani CLASS ONE The Internet revolution 3
  4. 4. • Clients at mouse lenght: opportunity but also risk (competition at mouse lenght) • Closer relation between industry and finance: • Expectations drive value • Value propositions drive expectations • ICTs raise total factor productivity • E.g. P&G savings 20%-30% due to the intensification of Internet usage • Debate about sustainability of this system: • Security issues • Privacy issues • Digital divide Knowledge Management 2014 • Time is key (and no longer space): speed; real time • E-commerce: Web revolution = Railways : Industrial revolution Lucia Marchegiani CLASS ONE The Internet Revolution 4
  5. 5. 10011100101 10011100101 Video Documents 10011100101 Global Information Infrastructure 10011100101 10011100101 Voice 10011100101 10011100101 Knowledge Management 2014 Film Lucia Marchegiani CLASS ONE Digitalization and convergence 10011100101 5 Books Commercial transactions Pictures
  6. 6. new economy post-industrial society and economy Lucia Marchegiani CLASS ONE Globalization Knowledge Management 2014 Context
  7. 7. organization • • • • New technologies New managerial cultures and styles New organizational principles New internal relations culture Knowledge Management 2014 Firms change Lucia Marchegiani CLASS ONE Which innovations for firms? 7
  8. 8. Goods manufacturing Customers’ lifestyle Firms’ life Ideas generation Knowledge Management 2014 Economic relations Lucia Marchegiani CLASS ONE New economy changes 8
  9. 9. POST - FORDISM Intangibles Intellectual capital Quality in work Knowledge Management 2014 FORDISM Heavy manifacturing Lucia Marchegiani CLASS ONE New economy changes 9
  10. 10. Knowledge Management 2014 Lucia Marchegiani CLASS ONE Timeline
  11. 11. Lucia Marchegiani CLASS ONE • The essential difference is that in a knowledge economy, knowledge is a product, while in a knowledge-based economy, knowledge is a tool. This difference is not yet well distinguished in the subject matter literature. They both are strongly interdisciplinary, involving economists, computer scientists, engineers, mathematicians, librarians, geographers, chemists and physicists, as well as cognitivists, psychologists and sociologists. • Various observers describe today’s global economy as one in transition to a “knowledge economy,” as an extension of an “information society.” The transition requires that the rules and practices that determined success in the industrial economy need rewriting in an interconnected, globalized economy where knowledge resources such as know-how and expertise are as critical as other economic resources. According to analysts of the “knowledge economy,” these rules need to be rewritten at the levels of firms and industries in terms of knowledge management and at the level of public policy as knowledge policy or knowledge-related policy. • Source : Knowledge Management 2014 Definitions
  12. 12. • Productive knowledge, once based on rationality, starts to be socially distributed • The knowledge of a single firm sums up with the one of its suppliers, customers, workers. They all share the productive chain and knowledge Lucia Marchegiani CLASS ONE • Crisis of Fordism Knowledge Management 2014 The turning point
  14. 14. • Knowledge as an asset does not obey the traditional economic laws Lucia Marchegiani CLASS ONE • Why has knowledge become the first productive asset? Knowledge Management 2014 Knowledge as a strategic asset: characteristics and anomalies
  15. 15. Lucia Marchegiani CLASS ONE • First Anomaly: • For traditional factor, the cost of re-producing is similar to that of the first production • If the product is sold, it is possible to recombine the factors to produce it again Knowledge Management 2014 Find the differences
  16. 16. Lucia Marchegiani CLASS ONE • Knowledge does not deteriorate with the use • Knowledge multiplies when shared • When the traditional factor (work and capital) have produced knowledge, they have been radically transformed • Irreversible change • Knowledge re-production (e.g. copy, imitation) is a completely different process than the one of producing it Knowledge Management 2014 Knowledge economy
  17. 17. • Ex: use of work and capital in R&D activities produces knowledge and skills that can be applied to a new product/process • This would make knowledge comparable to other factor • Traditional economy = Knowledge Economy Lucia Marchegiani CLASS ONE • Hyp: Knowledge is an intermediate factor Knowledge Management 2014 Knowledge as a strategic asset 2
  18. 18. Lucia Marchegiani CLASS ONE • 2nd anomaly • For traditional factor, the diminishing return law applies • Knowledge is not “consumed” with the single use, it is renewable at very limited costs Knowledge Management 2014 Find the differences 2
  19. 19. • The laws of supply and demand dictate at what price and quantity the economy operates most efficiently – the point of equilibrium. • In a true knowledge economy, knowledge and information are demanded and supplied. The economic system finds equilibrium. • The shape of the knowledge demand curve follows the same path as the manufacturing demand curve. The more one piece of information is demanded, the more value the market will place on that knowledge asset (directly proportional). Knowledge Management 2014 • The quantity of goods or services demanded and subsequently supplied determine the price of goods or services. Lucia Marchegiani CLASS ONE Supply and demand 19
  20. 20. Equilibrium in the knowledge economy is achieved when the supply curve perfectly overlays the demand curve. As a result, an infinite number of equilibrium points occur Knowledge Management 2014 • The shape of the knowledge supply curve, on the other hand, does not follow the same principles as the manufacturing supply curve. • For a manufacturing supply curve, the price of a physical asset decreases as its supply increases (inversely proportional). • For a knowledge supply curve, the price, or value, of a knowledge asset increases as its supply increases (directly proportional). Lucia Marchegiani CLASS ONE Supply and demand 2 20
  21. 21. • Entertainment/business value • Knowledge • Cost structure of information providers • High fixed costs, low marginal costs • Value-based pricing -> differential pricing • Versioning • Delay Lucia Marchegiani CLASS ONE • Information • Information goods • Value of information to different customers Knowledge Management 2014 Basic concepts
  22. 22. Lucia Marchegiani CLASS ONE • Information as experience good • The economics of attention • Simon “a wealth of information creates a poverty of attention” Knowledge Management 2014 Information
  23. 23. • Side note: In physics, this law is known as the conservation of information. There also exists the information paradox which some physicists have argued exists at the singularity of a black hole. As matter collapses in a field of infinite gravity, does the information stored in atoms disappear? • As knowledge is utilized, more knowledge is generated. Two pieces of knowledge come together to form new knowledge. The production of knowledge is an infinite, self-perpetuating process. Knowledge Management 2014 • The more information on a subject that exists, the more it is valued. • Knowledge follows a law of conservation. As knowledge is consumed, it does not disappear as a physical asset does. Rather, knowledge has infinite duration. Lucia Marchegiani CLASS ONE Knowledge 23
  24. 24. • Different production and business models • Complementary produts -> complementors Lucia Marchegiani CLASS ONE • Infrastructure is to information as a bottle is to wine • Store, search, retrieve, copy, filter, manipulate, view, tr ansmit, receive • Systems competition • Different components are madeby diffeent manufacturers Knowledge Management 2014 Technology
  25. 25. • Once you have chosen a technology, or a format for keeping information, switching can be very expensive • Own experience? • Positive feedback, network externalities, and Standards • Positive feedback makes large networks get larger • Demand-side economies of scale: the key challenge is to obtain critical mass • Self-fulfilling expectations • Timing of strategic moves Lucia Marchegiani CLASS ONE • Lock-in and switching costs Knowledge Management 2014 Technology and barriers to enter
  26. 26. Lucia Marchegiani CLASS ONE • The Digital Divide refers to the gap between those who “have” access to the Information and Communication Technology (ICT) and those who “have not” Knowledge Management 2014 The Digital Divide
  27. 27. Knowledge Management 2014 Lucia Marchegiani CLASS ONE Digital Divide
  28. 28. Knowledge Management 2014 Lucia Marchegiani CLASS ONE Digital Divide
  29. 29. • Quality of information • Interactivity, cost, relevance, security, accuracy… • Reach: • Dimension of the population of users that can be reached by the information Knowledge Management 2014 • Richness: Lucia Marchegiani CLASS ONE The Digital Divide
  30. 30. Knowledge Management 2014 Lucia Marchegiani CLASS ONE Digital Divide The Richness-Reach Tradeoff
  31. 31. Knowledge Management 2014 Lucia Marchegiani CLASS ONE Digital Divide IBC_DD
  32. 32. • Epic fail Lucia Marchegiani CLASS ONE • Not always good for companies Knowledge Management 2014 Usage of social media