Implications of the Knowledge Economy onto L&D Activities

What is Knowledge Economy?

There is no doubt that we are immersed by the Knowledge Economy and its implications are now far-reaching in all aspects of personal and professional settings. A knowledge economy can be defined as one that is overly reliant on knowledge-intensive way of performance, which gives way to greater dependence onto intellectual capital rather than physical capital (Pettinger, 2017). Thus, such an economy is associated with high technology, service sectors as well as business sectors (Pettinger, 2017). 

The characteristics of knowledge economy can be summarized as follows (Pettinger, 2017): 

• Productivity is mainly dependent on data and info 
• Growth in high-tech industries, services and demand for skilled university graduates 
• Knowledge being an infinite resource that can be shared without being lost 
• Innovation being a key driver for production while tacit knowledge being of superior importance 
• Globalization and easy diffusion of knowledge  

This has brought about some implications onto L&D, as education and learning being the engine for knowledge economy (Grwoth Engineering, n.d.). L&D, then, need to be cautious of the following (Grwoth Engineering, n.d.): 

• Attract and retain the brightest of minds: as those have the power to choose whichever employer they feel comfortable with, i.e., having a Talent Pipeline in place; 
• Develop the sharing of knowledge: as studies show that by the age of 35, 25% of employees have already worked 5 different jobs. This means lots of experience that L&D need to make sure distributed and shared through fostering a culture of continuous learning and share of knowledge; 
• Extra emphasis on social learning: as the magnitude of progress accelerates, social learning that is facilitated by L&D professionals is key to ensuring employees’ skills are up-to-date. Technology has allowed for such capture, storage and retrieval of knowledge in a way that captures the entire organization’s intellectual capital. 

Key Issues Raised by Intellectual Capital Accounting 

However, the point of Intellectual Capital Accounting has been gaining popularity with relation to its direct connection to the modern-day kind of wealth an organization possesses. Intellectual capital is different from financial capital, though, in that the latter can be counted and totaled to the aggregate total, but measuring and quantifying intellectual capital seems like a daunting mission (COOK, 2018). However, studies now show that corporates’ wealth is currently being measured based on its knowledge and how much intellectual capital they own (COOK, 2018). 

On the other hand, intellectual capital is an elusive aspect as what constitutes a competitive advantage to a finance company, for instance, will not be the same for Toyota in relation to intellectual capital and its application (COOK, 2018).   

 That being said, intellectual capital imposes some implications on L&D as follows: 

• The need to establish connections and foster collaboration. L&D will have to devise ways in which employees can share their knowledge and expertise through the leverage of technology. it’s, also, incumbent upon management to bring together the best of expertise so that a sense of togetherness is fostered in a way that boosts innovation and collaboration (COOK, 2018). 
•  Operationalizing some sort of knowledge management systems. In doing so, L&D would ensure that knowledge is available to all levels of the organization. Plus, new-hires would also benefit from data and info being readily available when needed (COOK, 2018). 
• The need to evaluation amid rapidly evolving business imperatives. The ever-changing nature of the modern business world makes it almost impossible for L&D to pinpoint proper metrics to measure intellectual capital and its application/contribution to problem solving (Cohen, 2015).  

References

Pettinger, T., 2017. The Knowledge Economy. [Online] Available at: https://www.economicshelp.org/blog/27373/concepts/the-knowledge-economy/ 

Grwoth Engineering, n.d. THE KNOWLEDGE ECONOMY: WHAT IT IS & WHAT IT MEANS FOR L&D. [Online] Available at: https://www.growthengineering.co.uk/the-knowledge-economy-meaning/ 

COOK, A., 2018. How to maximize your organization’s intellectual capital. [Online]  Available at: https://tettra.co/article/how-to-maximize-your-organizations-intellectual-capital/