Traditionally, innovation has been viewed as an exogenous process driven by the
application of highly abstract and codified forms of scientific knowledge that have
been developed outside the workplace (Lundvall 1992). According to writers, such as
Boisot, Drucker, Hamel and Prahalad, and Nonaka and Takeuchi, this is a gross
simplification. They argue that innovation must also be viewed as an exogenous and an
endogenous process. In other words, innovation can be spurred through the
exploitation of knowledge or information that is available inside firms and that enables
them to offer superior value in their traditional businesses and markets (Kim and
Mauborgne 1999). The challenge in the knowledge economy, therefore, is to build,
combine and integrate the knowledge assets held by individuals and ‘communities of
practice’ (Nonaka and Teece 2001).
One of the problems that is associated with the above debate about knowledge and
knowledge work, as Blackler (1995) has observed, is that most contributors to this
debate tend to define knowledge in very different ways and draw different conclusions
about which sections of the workforce will become knowledge workers. The diversity
of interpretations of the role it is purported that knowledge plays in the economy can
be illustrated by employing Blackler’s distinctions in relation to four - embrained,
encultured, embedded and encoded - different types of knowledge.
Some writers tend to view knowledge as though it was an embrained phenomenon. In
other words, it either exists in the form of a mental entity which is located in people’s
minds or as data which is located in websites. From this perspective, it is suggested
that innovation will take one of two forms. It will either involve senior management
filling any organisational ‘information spaces’ by scanning the environment and
identifying new sites of information that may provide an organisation with competitive
advantage (Boisot 1998), or using managers existing conceptual skills and cognitive
abilities to transfer knowledge from one part of an organisation to another (Drucker
1993).