In today's world, knowledge has displaced financial capital as the key to organisational success. Instead of being a cost item, human capital - people - has become the key asset for long-lasting business success.
Leaders have had to change their priorities: instead of optimising physical capital, they have to optimise people and their intellectual capital. Communities of people need to be created and maintained, instead of running and maintaining a 'money machine'. The new demands and opportunities of an interdependent global knowledge economy need to be understood, along with the implications for private and public decision-making by enterprises or society, whether on a local, national, regional or global level.
Leaders must also learn that the new knowledge dynamic surpasses the industrial paradigm of bureaucracy, centralised organisations and rigid communication. Business has moved towards new organisations that require flexibility, decentralisation and emphasis on collaborative networking.
The most valuable knowledge is very human: tacit knowledge, intuition, personal experience; they reside in people's minds. Before technology can enable that knowledge and even before culture can nurture it - knowledge management must begin with understanding why people don't communicate and share.
The globe today is experiencing unprecedented change in the application of knowledge and in order to successfully compete. The Latin American and Caribbean region (LAC) needs to understand the global dynamics and trends and understand specific regional issues. Successful development will be through acquiring more knowledge and innovation in order to process natural resources for the rest of the world and by taking advantage of short term opportunities while preparing for the long haul.
KM approaches in the past:
By the middle of the '90s, the KM programs introduced in LAC were influenced primarily by multinational companies, large enterprises and consulting firms in the region that were implementing KM programs as a corporate strategy. Initially much emphasis was put on information technology but high costs for IT infrastructure caused barriers for the implementation of KM programs. Additionally, some cultural issues evolved. Local managers demonstrated a lack of interest in KM strategies, with a perception of KM being just another fad, while local executives felt KM programs could be used for a competitive advantage.
Additional issues evolved relating to middle managers and supervisors. In the beginning, KM was rejected. Workers were reluctant to embrace the new managerial strategy. Feeling threatened by loss of authority, concerned about having their competencies and capabilities tested, and terrified of losing power, these workers hoarded their knowledge.
The cultural struggle is a lesson important to be shared and kept to be analysed for future use, especially in diverse cultural enterprises. The learning process at the earlier stages is important for dispelling any misconceptions. Offering learning experiences, both conceptual and practical, are recommended to decrease the level of uncertainty - workshops, conferences. Exchange of internal and external experiences start to build trust.
KM advocates from overseas played a remarkable role in disseminating new techniques and methodologies through releasing publications, books and articles. Interest spread quickly, influencing the top LAC companies, with KM and innovation included in most of the executive board agendas. Additionally, many executive conferences in Europe and the US covered knowledge management, organisational learning and innovation.
In a short time these conferences were replicated in LAC countries of Mexico, Colombia, Chile, Argentina and Venezuela. Indeed in Caracas, there have been five meetings of the International Forum on KM, innovation and intellectual capital, featuring well-known global practitioners from the five continents.
Those approaches helped bring an awareness of the knowledge value proposition and added to the implementation of KM and IC strategies. And also, LAC universities started to pay attention. Knowledge management in Latin America has become a reality.
Companies now embracing KM:
Oil and gas sector:
Most oil and gas companies have embarked on KM to improve organisational capability, creating new work environments where knowledge and experiences can be easily shared.
The community of practice has evolved as the most useful approach. The communities enhance networking and collaboration through data, information and experience sharing, even long distance. There is easy access to experts worldwide for financial information, teamwork with customers and partners in search of near-term efficiency, productivity, and service quality improvements through knowledge reuse. The communities provide many tools and processes to link people to information, expertise and best practice. Technology, ongoing training and support have been developed to gain long-term benefits, with benefits of improving employee motivation, faster learning and increased innovation.
The oil and gas companies in LAC:
PDVSA, the Venezuelan oil and gas company, was a pioneer in KM. In 1998, while ranked as the second largest oil and gas company in the world, the pressure of competition caused the firm to look at adopting another approach to business. A benchmarking study at that time identified companies implementing KM programs - BP, Shell, Schlumberger, Chevron and others.
A program was implemented in 1998 when some of PDVSA's business units started a KM initiative from the grassroots level, eventually expanding the program across the whole organisation. A corporate knowledge management team was created from a group of advocates in the different business units who were interested in getting a synergy going from the different efforts that were developing independently within PDVSA, such as technological intelligence, knowledge centers, a center of excellence and communities of practice, with the knowledge communities becoming the center for business process management.
This concept permeated all divisions and businesses units, generating experiences, practices and methodologies and promoting concrete results. There were over 140 communities of knowledge that became the KM Corporate Network with more than 20,000 out of 45,000 employees connected to share knowledge and experiences. Unfortunately, during the national strikes more than 22,000 employees were fired and the KM initiative stopped. There have been some attempts to reorganise the KM program; however, today's PDVSA is an enterprise with another strategy in mind with its main goal is to be a social enterprise.
ECOPETROL - Colombian oil and gas company launched a KM program in 2004 with the emphasis on developing CoP initiatives.
PETROBRASS - Brasil Oil Company has implemented some KM initiatives.
Details on these two firms are sketchy because no public documentation is available.
Universities, science and technology:
Universities in LAC have developed a knowledge culture. The rapidly expanding use of technology in teaching, along with learning about the new knowledge economy, forced LAC universities to transform the ways in which knowledge was managed.
In general, the universities in LAC have helped the expansion of knowledge management in Latin America by offering graduate courses, research and thesis programs. Additionally, intensive IT software development has been increasing. But, in spite of advances, there are few internal KM programs developed to foster KM and innovation dynamics. LAC universities are being called on to develop accelerated programs and encourage knowledge management and innovation cultures.
During the last two decades a proliferation of technology parks took place. And with that came the reality that much knowledge movement is actually borne out of practice, not academic theory or consulting models. In new learning strategies there needs to be a balance between the traditional academic approaches and the practical "real-time" application of learning.
And so, recently some LAC countries - Mexico, Panama, Brazil and Chile - have shifted from technology parks to knowledge cities. This shift has created infrastructures to support the development of science and technology, which enhances a dynamic culture of entrepreneurship and industrial incubators to generate some spin-offs for SMEs and the innovation process.
Different names have been given to those institutions, such as K metropolis, ideaopolis, K cities. These are institutions that will play a central role in the growth of useful knowledge itself.
Multilateral organisations
The multilateral economic and social development agencies such as the Inter-American Development, the World Bank, Central American Federation (CAF) and the International Development Research Centre/Creating Inhabitable Cities (IDRC/CIID) have been creating KM and innovation programs.
Amongst those organisations, the World Bank was the first to be engaged in the KM strategy, announcing in 1996 that it was becoming a 'knowledge bank'; in a short period the World Bank engaged in a knowledge-sharing program emphasising communities of practice. The KM program suffered some ups and downs but recently there are initiatives towards revitalising the KM and innovation programs. However, the cultural elements have been embedded and KM methodologies such as lessons learnt and best practices have been required in social and technological loans programs developed in LAC.
The other multilateral organisation that influenced LAC is the IDAB which by 2007 launched a knowledge management and learning strategy that promoted knowledge-based decision-making organisations; enhanced its knowledge partnership with member countries; and used integrated knowledge through all its activities.
The MIF (Multilateral Investment Funds) is implementing the Knowledge to Practice program that aims to create and share knowledge for development using the practical experience of local partners based on an information repository, communities of practice and lessons learnt. No doubt all initiatives will create new cultural patterns through well-designed programs needed for competing in the knowledge economy.
Sharing knowledge in the rural and agricultural area has been done in Peru, Guatemala, Ecuador, Brasil and Argentina, using basic techniques such a story telling, after action review, and use of information and technology facilities (ITC). However, the potential of using KM for rural development is even greater, with the World Bank serving as the facilitator of welfare and environmental stewardship which will help to innovate and deal with problems of nutrition, epidemics and inclusion.
The Information Communication Technology (ICT): ICT is considered the driving force behind the long unprecedented economic growth period of the last decade. It provided the infrastructure for economic development, helped create the knowledge society, contributed to innovation and created value for the economy. More importantly, it brought the world closer together by improving the dissemination of knowledge, accelerating research, stimulating innovation and facilitating collaboration. As we have all witnessed, the advent of the internet, broadband communication, open source collaboration, and the rapidly improving computing capacity has changed the world economy drastically. The knowledge economy and the globally integrated enterprise have become a reality. The competitive playing field between industrialized and emerging markets is levelling. The economies of industrialized countries are moving into services. Business models and processes are globalized. ICT is changing quickly, shortening its life cycle and speeding up its obsoleteness.
Innovation has become the battle cry for many countries looking for job creation and better living conditions. Research is needed to use existing knowledge and to create new knowledge. It is the means for maintaining intellectual leadership. Knowledge management is the solution for sustaining a competitive edge in a knowledge economy.
Higher education plays a major role in all these processes by preparing and providing the required human capacity through education, creating and disseminating knowledge to society, and directly contributing to economic development. We shall explore the ICT factor in research, innovation and knowledge management.
The whole question will be how and where value is created and what ICT contributes to this value creation process. Lastly what role does higher education role play and how does it adapt to this quickly changing environment.
Knowledge cycle consists of knowledge acquisition, assimilation and development. Knowledge development may lead to creating or discovering new knowledge/technology or creating new value by applying knowledge/technology to societal or business challenges. The knowledge development stage is where value is created, in other words, innovation. The knowledge cycle consists of three pillars: the knowledge/technology acquisition, the knowledge/technology assimilation, and knowledge development.
Knowledge management is in fact the process of managing the knowledge cycle. However, in common usage, knowledge management is more associated with business organization objectives focussing on the re-use, awareness, learning of experiences and knowledge in the enterprise.
Innovation is doing something better or new. This is knowledge development, shown above, where new knowledge or technology can be created or discovered or new applications of technology can be found. These applications can provide the solutions or meet the needs of our society or businesses. In order to do so, a deep understanding of business or societal challenges is a must. In other words, innovation requires a fusion of knowledge between ICT and business/society problems or a multi-disciplined collaboration.
The creation of new knowledge or technology is also known as discovery or invention. Research is the scholarly work needed to arrive at finding new things or new knowledge. This is the process of creating value for knowledge. Critical success factors for research are quality, pertinence to societal or business needs or economic growth, and sustainability. We determine quality by its degree of excellence, superior to existing knowledge or products. Pertinence is defined by its degree of relevance to meet a business need, economic development or a societal challenge; its nature can be in the form of knowledge, technology or a solution. Quality and pertinence are among the attributes that define the value of the research outcome. Sustainability is determined by the research's ability to survive and grow. Without this, there is no future for research or activity of research. Sustainability can be achieved if the research's results or innovations can be used effectively or profitably. In order to arrive at these critical success factors, the university research community should align their interests with the strategic objectives of industries and government in order to tackle societal and business challenges and get funding and resources from them.
These resources can also help universities improve their infrastructure. By working closely with industries, the governance and processes can be more realistic and efficient. Research and innovation can therefore be useful to the government, sponsoring industries or society at large. These groups will contribute to the research pertinence and, eventually, the sustainability of the research.
However, by working together with government and industries, more attention should be paid on how to improve intellectual property practices to foster innovation. Some milestones were achieved in the US with the open collaboration principles, where research results from industry-university collaborations can be made available for free.
That is the eco-system for innovation. It requires a concerted effort of government, businesses, industries and education to synchronize and establish the appropriate pacing for different economic and educational activities for the process to work. Any isolated effort will not assure the quality, the pertinence, and the sustainability of the research activity or the progress of its value creation process. Social displacement (brain drain) and social misplacement (unemployment and wrong jobs) are examples of a lack of synchronization of the eco-system.
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