Knowledge Management and Path Dependancy

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‘KNOWLEDGE MANAGEMENT
PRACTICES’ AND PATH-DEPENDENCY
IN INNOVATION*
CRIC, The University of Manchester
Professor Rod Coombs & Richard Hull
CRIC Discussion Paper No 2
June 1997

Published by:

Centre for Research on Innovation and Competition
The University of Manchester
Tom Lupton Suite
University Precinct Centre
Oxford Road, Manchester
M13 9QH

*The authors gratefully acknowledge the support of the
ESRC through its ‘Research Programme on Innovation’ for the work on which this paper is based.

1. INTRODUCTION
An increasing number of researchers and commentators have recently been turning their attention to 'knowledge management'1, and particularly the role of knowledge management in innovation2. It seems that there are two major underlying influences which are at work in these discussions, and that they have both complementary and contradictory features.

The first of these influences can be seen as 'internal' to innovation research and it is the literature which synthesises the received findings of 'innovation studies' into an evolutionary economics perspective on technical change. The central feature of this work for our purposes is its weaving together of the observed path dependency of innovation, with the firmspecificity of the routines which generate innovation. For example, Metcalfe & de Liso3 elaborate the idea that a business unit will have a specific 'normal design configuration', a shared mental framework of fundamental design concepts relating to specific technologies, providing the 'operational route' to specific artefacts. Thus the perspective in this literature links knowledge to innovation by focusing on firm-specific routines which stabilise certain bodies of knowledge, embed them in the shared understandings within the firm, and provide templates for deploying that knowledge to produce innovations which have a distinctive organisational 'signature'.

The second underlying influence in the 'knowledge management' literature has arisen at the interface of innovation research and management research. It derives from the perceived increase in importance of knowledge as a factor of production and as a driving force in broader changes in the nature of contemporary economies, and in the enterprises which operate in those economies. One of the key reference points in the emergence of a new focus on 'knowledge management' in enterprises is the work of Nonaka4. Arising originally from empirical studies of new product development in Japanese firms, Nonaka has developed a model of the various ways in which organisations create knowledge and has suggested a style of management and an organisational structure for best managing the knowledge creation process, namely the 'hypertext organisation'. Central to the model (as indeed to much other work on knowledge management) is Michael Polanyi's distinction between tacit and explicit knowledge. Nonaka argues that tacit and explicit knowledge can be converted from one to the other, and his main focus is managing the interactions between the four 'modes of knowledge conversion'. Another major contributor is Dorothy Leonard-Barton5 who bases her discussion

more firmly on the 'core competence' strategy literature and has a focus on what she calls "the whole system of knowledge management" (ibid, pp 271-2, original emphasis), which is seen to be an integral element of competitive advantage, or 'core technological capability'. Her specific interest is in the 'key knowledge-building' activities

shared problem solving,

implementing and integrating new technical processes and tools, experimenting and prototyping, and importing and absorbing technological and market knowledge.

In many ways, these two perspectives - the evolutionary economics perspective and the 'knowledge-centred-model of the enterprise' - are compatible with each other. At the very least it can be argued that they have considerable potential to enrich and illuminate each other....
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