We can use Treacy and Wiersema's model to illustrate how the world has increased its reliance on knowledge by observing how the economic focus has shifted over time. Early on, the focus was on concerns with how to make the most with limited resources. Later, the focus shifted to making clever products. Presently, advanced organizations focus on creating ingenious solutions and developing broad relationships to make customers succeed in their business. Arguably, the present emphasis on knowledge management has resulted naturally from the economic, industrial, and cultural developments that have taken place. In the opinion of many management pundits, we have already entered into the 'knowledge society'. This notion is based on the new emphasis and explicit dependence on adding competitive value to products and services by application of direct or embedded human expertise-knowledge. This is a considerable change from providing value by relying on natural resources or operational efficiency as was the case in previous eras. Given this framework, we can construct a perspective of the evolution that has led to today's importance of Knowledge Management. Historic developments may be portrayed by the following descriptive stages of dominant economic activities and foci:
* Agrarian Economies:
The economic stage after hunting and gathering led to agrarian societies that focused on creating food supplies by raising crops and domesticating animals. The role of people was to provide physical labor for animal husbandry, working the soil, planting, and harvesting. Knowledge in itself was not generally recognized. Success and viability were to a large extent determined by farming skills. Focus: Agriculture.
* Natural Resource Economies:
Historically, market advantages were created by providing products by exploiting natural resources-minerals, agricultural commodities, etc. The role of people was to facilitate conversion of resources to saleable goods and to bring them to markets, mostly by performing the physical work required. Additionally, small groups of expert tradesmen would provide highly personalized services. Knowledge started to be recognized, in part within the guilds and its masters. Focus: Natural Resource Exploitation Dominate while Customer Intimacy was Pursued Separately by Expert Tradesmen and Guilds.
* Industrial Revolution:
During the 18th and 19th centuries conversion of natural resources and manufacturing of products were increasingly better organized and mechanized to improve the efficiency of the processes. Market advantages for enterprises and for countries were created by being able to use people and technology to provide goods and services at acceptable quality and at affordable or lowest price. Operationally, that often meant having individual workers produce as much goods as possible using highly standardized routines. Knowledge was recognized but only among the guilds and other specialists. New focus: Operational Excellence through Efficiency.
* Product Revolution:
During the first half of the 20th century a new dimension was added to the focus. Initially, manufacturers provided greater product variability produced at the lowest possible cost. Later, additional emphasis started to be placed on product sophistication. Furthermore, the concept of services to complement products started to emerge. The notion of 'improved products' that served their purpose better were increasingly accepted. Market advantages were based on having products that would fit a particular market niche both functionally and economically. The roles of professionals and craftspeople were changing to where expertise, particularly in the form of skills, was becoming important. Recognition of the value of broad individual knowledge had not changed from the industrial era and was still not explicit. New focus: Product Leadership through Variability and Sophistication. *...