Entovation International - Delivering Knowledge Innovation Strategies for the Millennium
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Collaborative Innovation and the Knowledge Economy: Toward the 'World Trade of Ideas'
by Debra M. Amidon

Published for:
The Society for Management Accountants of Canada


Interest in a new economic world order based upon intellectual capital has grown exponentially in both industrialized nations and developing countries around the world. Organizations are wrestling with the implications of such kaleidoscopic change in every aspect of our society. Enterprise leaders are laden with outdated management technologies, not suitable for such a dynamic climate of opportunity. Indeed, our ability to effective manage these bountiful, intangible resources may be the challenge of the next millennium.

The only competitive advantage of the dynamic future is an organization's ability to learn - create ideas and move them into the marketplace profitably and expeditiously. In fact, it is the one capacity which is difficult - even impossible - to imitate or emulate - because it is directly related to human capabilities. The company's ability to manage knowledge must be at the heart of a strategy to create distinctive competencies and unique market positioning.

Therefore, it is not that we are at a loss for new ideas, but rather the infrastructure to effectively move ideas to prosperity (i.e., the innovation cycle).

This monograph is intended to (1) outline the major trends, (2) identify fragmented streams of activity which could be coalesced with a new common innovation language, (3) define the core premise fundamental to a collaborative future of shared prosperity and (4) suggest a blueprint for a dialogue which may chart a direction toward the emerging "world trade of ideas".

Sample Text:

"Economic theory has a problem with knowledge:
It seems to defy the basic economic principle of scarcity, the more we use it and pass it on, the more it proliferates...infinitely expansible... What is scarce in the new economy is the ability to understand and use knowledge."

1996 World Economy Survey
The Economist

I. Introduction

Yesterday's management theory is today's management practice. For years we have searched for a new management paradigm which would take us beyond the Tayloristic methodologies of the industrial age. We are living amidst the 'fad of the season', 'flavour of the month' and 'silver-bullet' tactics that barely keep us afloat - all in search of a more sustainable management philosophy. In some respects, these short-term strategies have caused more damage than good because we have not taken into consideration the long term - and, in particular, the behavioral - implications of our financial decisions. In essence, we have been managing what is manageable - measuring what is measurable - rather than concentrating on the fundamental (what some would now describe as intangible or hidden) drivers of prosperity.

Today's economy can be described as kaleidoscopic. It is not merely the acceleration of the speed of change that provides atypical managerial threats. Rather, it is the unexpected impact of the multitude of simultaneous changes which creates the conditions which challenge even the most indomitable manager. There are no quick answers, no cookbooks. This is a 'real-time' environment of opportunity.

Three lessons we can learn quickly from this reality:

(1) We must link the value of human potential to economic results;

(2) We must envision the 'whole' in order to understand the relationship of the parts; and

(3) Our future must be collaborative based upon our interdependence.

The knowledge economy affords us a very different world in which we will operate - an environment with bountiful resources defined as intellectual capital. There are significant differences in managing such an asset: knowledge resides within the individual, it is not necessarily material to be manipulated. Knowledge grows when it is shared with others. Once you share your knowledge, you still have it. It is not a resource which gets depleted. It is difficult to protect - in the traditional terms of intellectual property. The nature of the resource transcends the boundaries of any function, sector, industry or geography; and therefore, it is the ultimate bonding source. By definition, it is universal in scope.

Knowledge has always been considered the foundation for economic growth. The difference today is the nature of the infrastructure within which knowledge is created, enhanced, exchanged and applied in products and services. These innovation actions can lead to the success of an enterprise, the vitality of a nation's economy or society as-a-whole. According to Peter Drucker, this is precisely the competence needed for the next millennium - the ability to innovate and to measure the performance thereof. (1) It is that simple and that profound.

Most significantly, innovation - redefined according to the flow of knowledge - requires an environment which demands collaboration - not competition - for survival. However, most economies of the world have been raised in a culture which rewards individualism, independence and autonomy. The rage of the 1980s and early 1990s have been one of international competitiveness. We constantly compare, contrast and subsequently build initiatives to compete - hoarding and protecting information at both enterprise and cultural borders.

How then do individuals, groups and nations realize that - in the end, they are truly dependent upon the success of one another? There is far more that we can accomplish together - economically, behaviorally and technologically - than we could alone. This is the essence of the massive transformation occurring all around us. This is precisely what these notions of knowledge creation, conversion and commercialization provide the foundation for an interdependent - and - symbiotic future.

In 1989, we performed research - reported in Global Innovation Strategy (2) - on the nature of alliances in this kaleidoscopic economy. By contrasting activities in different parts of the world and according to diverse functional perspectives, we were able to discover the managerial implications on three economic levels: micro-economic (intra-organizational); meso-economic (inter-organizational) and macro-economic (transnational).

In other words, it is not enough for an organization to transform its internal operations. Optimization requires developing a series of interdependencies with external stakeholders (e.g., suppliers, distributors, research joint ventures, collaborative marketing, customers and even competitors). Today, these are described as the extended enterprise, supply-chain management, or the Strategic Business Network (SBN) - which will be outlined later.

Organizations worldwide have begun to embrace the innovation agenda and invariably they all describe, in one form or another, the process of innovation. But this is not technological innovation with which we have been familiar. This environment requires us to have a fundamental understanding of what seem very progressive concepts: intellectual capital, intangible assets, real-time learning, knowledge management, global conferencing, and more. Societal organizations, such as the OECD, the SEC, the United Nations and The World Bank, have also launched major efforts in this arena, and the initiatives must be brought together in a common agenda.

This is the purpose of this monograph: to outline the trends, issues and offer a possible direction forward which might combine these activities under a shared vision and common language. It matters not at what economic level you work - the enterprise, the nation or the world, there are commonalties in our values and aspirations which - when combined - create a higher standard of living for us all - regardless of where we live.

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Last updated: 13 Aug 1999