It is also partly because many researchers in organizational science and business
economics have attempted to explain how firms addressed their competitive problems
by focusing on how they deployed science and technology as ‘solutions’ to their
perceived problems, rather than analysing how exogenous strategies can support
product and service development (Kim and Mauborgne 1999). Increasingly, more and
more firms are focusing on ‘knowledge-based’ innovation (Kim and Mauborgne 1999).
In other words, they are redefining their competitive problems by identifying their core
competences and their internal knowledge creating strategies and focusing on the
performance criteria that matter to customers and adopting business and management
strategies that reflect customers’ value preferences (Prahalad and Ramaswamy 2000;
von Krogh and Cusamano 2001). One consequence of the emerging interest in
becoming a ‘knowledge creating company’ (Nonaka and Takeuchi 1995) has been that
a much more pluralistic concept of knowledge has been introduced into the debate
about the knowledge economy and knowledge work (Spender 1998).
If the concept of the knowledge economy and knowledge work are to be defined solely
in terms of the secondary elaboration of science, the transition to this type of economy
and work throughout the EU is likely to be a slow and uncertain process. Furthermore,
it is likely that, even in those regions and sectors that are characterised by science-
based production, ‘low-skill’ work will continue to flourish (Finegold 1999). In
contrast, if a more pluralistic interpretation of the concept of the knowledge is adopted
that reflects the range of ways that firms can act to improve their product and service
strategy, it is far less easy to determine the extent of the transition to a knowledge
economy. For example, recent evidence estimates that only about a quarter of all
enterprises in Europe have adopted ‘knowledge-based’ product and service strategies
(OECD 1996). Nevertheless part of the reason for this slow transition to ‘knowledge-
based’ organisations is that firms are either reluctant to engage in wholesale
organisational change or slow to grasp the full implications of the strategic decisions
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