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June
2006 Editorial
The Knowledge Economy and Organizations
Editor of the E-Journal of Organizational Learning and
Leadership
While most accept
that the industrial age is past and dying and that the knowledge economy is
present and emerging, both the promise and pain of this new era accompany
organizations in transition. Peter Drucker (1909-2005) states, “Knowledge has become the
central resource. . .”1 and describes two reasons why the change
processes of post-industrialism can be so difficult for organizations. First, while transitions to the knowledge
economy have been rapid and without the parameters of the industrial age, he
claims that the industrial revolution was actually equally or more impactful.
Almost everybody
today believes that nothing in economic history has ever moved as fast as, or
had a greater impact than, the Information Revolution. But the Industrial
Revolution moved at least as fast in the same time span, and had probably an
equal impact if not a greater one. 2
Hence, the tenets
of the industrial age are deeply embedded in organizational culture and
practice, making the process of adapting to the knowledge age complex. Loermans explains,
“According to Allee (1997), we are still at the early
stages of research into collective learning and knowledge building processes at
the organizational level and there is considerable territory yet to be explored
in this area.”3
The second difficulty
of transitioning to the knowledge economy is that its nature is more abstract
and therefore more overtly difficult to comprehend, as Drucker
explains its surprising path of development.
It is something
that practically no one had foreseen or, indeed, even talked about ten or
fifteen years ago: e-commerce—that is, the explosive emergence of the
Internet as a major, perhaps eventually the major, worldwide
distribution channel for goods, for services, and, surprisingly, for managerial
and professional jobs. This is profoundly changing economies, markets, and
industry structures; products and services and their flow; consumer
segmentation, consumer values, and consumer behavior; jobs and labor markets.
But the impact may be even greater on societies and politics and, above all, on
the way we see the world and ourselves in it.4
Not only are there
overt and external changes in the knowledge economy, but there are several
penetrating implicit and internally-based ones that may redefine societies and
even the self-identification of individuals. This dynamic has implications for
organizational effectiveness based on the ability to learn and adapt
corporately. Loermans states, “High velocity change in the extant global
business environment demands high velocity learning and with the rate of change
continuing to increase relentlessly, pressure on organizational learning has
never been greater.”5
One phenomena of
the knowledge economy is the internationalization of educational institutions,
particularly that of higher education.
Scott describes why this is occurring:
Consequently, the
university is the pivotal institution in the rapidly globalizing, postmodern
environment because it produces (research mission) and transmits (teaching and
public service missions) the bulk of society's new information (Bell, 1973, pp.
245–246; Kerr, 1995, pp. 66, 86).6
Institutions of
higher education are central to the emerging knowledge economy as they provide
research, database creation and management functions that are integral to the
functioning of the private and public sectors.
And while Scott expresses concern over the loss of certain academic
freedoms, the loss of cultural and nationalist heritage, and the loss of
quality of research and teaching, nonetheless, it appears that this direction
is frequently chosen by colleges and universities in the emerging knowledge
economy.
As an emerging
mission of the university, internationalization, or service to the body of
nation-states, involves the multiple missions of teaching, research, and public
service or nationalization. Frequently, internationalist and nationalist goals
may conflict due to economic, political, or cultural differences. Despite the
complexities, an apparent convergence of higher education policies is now afoot
worldwide.7
One result of the
knowledge economy is that higher education operates in the midst of the
essential functions of information generation, information flows and
communication of information to society.
This means that traditional campuses, just as other traditional
organizations, are faced with issues of transition and change management of the
knowledge economy. Higher education
institutions will have to decide which elements of institutional brand to
maintain and which elements to relinquish.
Whether higher education will be able to balance between the more
individualistic existence of the industrial age and the postmodern relativism
of the post-industrial age, is yet to be seen.
It appears that such a balancing act may be difficult to accomplish.
Given the forces of
change in the knowledge economy, that present opportunity for both promise and danger, the promotion of collaborative
communities and partnerships that include education, non-profit and for-profit
enterprises is called for. If thoughtful
organizational restructuring and change does not occur as a result of the
knowledge economy, then one is left to question how much viable knowledge in
regard to organizational effectiveness is actually being understood and
implemented in these times. The promise
of the knowledge economy is that organizations can improve; the danger is that
organizational improvement is relatively defined to the extent that it becomes
meaningless in specific contexts. The
knowledge economy, therefore, will depend on the success of collaborative and
cooperative communities working to manage these change processes through
focused research efforts, best practice awareness and collegial problem
solving.
A special acknowledgement is given to Ms. Pam Kellett, Director of Operations Macomb Intermediate School
District Site, School of Education and Human Services Continuing Education,
Oakland University, for her assistance in the preparation of this editorial.
References:
1Drucker, P. F.
(1992). New
priorities. In Context, Summer 1992, 6. Retrieved from: http://www.context.org/ICLIB/IC32/Drucker.htm
2Peter
Drucker Quotes.
The Quotations
Page. Retrieved from:
http://www.quotationspage.com/quotes/Peter_Drucker
3 Loermans, J. (2002). Synergizing the learning organization
and knowledge management [Electronic version].
Journal of
Knowledge Management, 6(3), 285.
4Drucker, P. F. (1999). Beyond the information revolution
[Electronic version]. The Atlantic Monthly 284(4), 47.
5Loermans, J. (2002). Synergizing the
learning organization and knowledge management [Electronic version]. Journal of Knowledge Management, 6(3), 290.
6Scott, J. C. (2006). The
mission of the university: Medieval to
postmodern transformations [Electronic version]. The Journal of Higher Education, 77(1), 30.
7ibid
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