The surge of interest in viewing innovation as a knowledge-driven endogenous process
indicates that some firms have gradually begun to recognise that the knowledge held or
developed endogenously within organisational settings may provide them with a
synergistic advantage that is not replicable in the marketplace (Spender and Grant
1996). On the one hand, it has a commercial relevance different to the acquisition of
new scientific knowledge, since it can be used to help firms to redefine the competitive
problem they face and help them to reconfigure product and service delivery. On the
other hand, it introduces a new dimension of skill into work roles that is different from
traditional conceptions of skilled performance. In comparison with ‘old work roles’
where the primary challenge was to coordinate the physical items produced by different
employees, the new challenge is to ensure that knowledge about products and services
is shared and does not ‘stick’ to people or within contexts (Seely Brown and Duguid
2001).
Knowledge, however, is not a commodity that can be controlled, moved about or
distributed at will. If firms are to innovate by exploiting their ‘knowledge assets’, they
they have to nurture a more reflexive relationship between the knowledge held by
customers as well as their own employees (Nonaka and Teece 2001). This has led
those firms who wish to compete in the knowledge economy to develop a diverse
range of new business development and management strategies to avoid stagnation and
accumulate an apply new knowledge to products and markets faster than competitors
(von Krogh and Cusamano 2001). Firms have begun to co-opt customer capabilities
(Prahalad and Ramaswamy) in order to co-produce new products and services with
other organisations (Victor and Boynton 1998). They have support intrafirm transfers
of knowledge either by identifying existing features of work environments (Szulanski
1996) or by creating new ‘environmental spaces’ (Nonaka and Konno 1998) that
facilitate knowledge sharing and knowledge production. Third, fimrs have created