Knowledge is the Most Important Investment Today
Posted on October 13th, 2008
Knowledge on the right things…
People are both the holders and transmitters of knowledge. As the economy migrated away from the Industrial Age, when capital and the tools of production were the primary factors of wealth creation, and entered the Information Age, wealth became concentrated in knowledge. In an information economy, knowledge assets are more important than physical assets in determining sustainable business success. Knowledge assets reside in individuals who have specialized knowledge or rare skills that cannot be easily replicated or replaced. Certainly knowledge work—accounting, architecture, law, systems programming, medical technology, and so on—is dependent on specific expertise, but even manufacturing work has become more reliant on specialized knowledge and skills, particularly for complex machinery and processes.
Although computers accumulate data and generate information, only people can make the information usable, can turn it into knowledge that results in calibrating a machine for a particular application, that interprets the results of an MRI, that analyzes the daily take from thousands of cash registers to determine what products are selling and why. Since expertise is relatively more expensive and more mobile than physical assets and can easily walk out the back door, organizations need to maximize its use.
Knowledge is enhanced through human collaboration. Collaboration and coordination among people can leverage individual performance, leading to new types of differentiation and higher levels of firm success. DuPont’s fluoroproducts plant in Louisville, Kentucky, created a more collaborative working environment that reduced plant emissions by 50 percent and saved more than $1 million annually . Collaboration is a function of relationships, the other thing that people uniquely bring.
