If you Google knowledge economy, mostly you get back scholarly PDFs — such as this one from OECD. There are disagreements on when exactly the knowledge economy began, but there’s no disagreement over the fact that it’s here in full force. Broadly speaking, it means a shift from industrial production methods focused on lower-skilled, repetitive-action workers and toward a technology-integrated, highly-skilled, mostly-creative workforce.
In most of the industrialized world, a knowledge economy is currently the norm. Even in some nations that might be considered developing — such as swaths of South America — the knowledge economy is still rapidly replacing the traditional industrial economy. If you want a crazy statistic around this general shift toward technology and knowledge, consider this: Sixty-four percent of the world has access to proper sanitation, but close to 75% of the world has a working mobile phone.
A lot of the above you probably broadly already knew — but the implications are the important part.
How the Knowledge Economy Changed Work
Quite literally, the knowledge economy has changed almost everything — although as happens periodically, the organizational design side of a business is slow to catch up. A focus on technology and highly-skilled workers has implications for working remotely (makes it easier, potentially saving companies money on their overhead costs for maintaining offices), recruiting (a new portfolio of skills is needed in candidates), management (considering a different type of leadership around internal knowledge), day-to-day responsibilities (managing/incorporating virtual team members), and much more.
Broadly, though, we still tend to treat work much the same as we treated it before the emergence of the knowledge economy: most people still have a standard work day of 9-to-5 (although they may stay later, yes), meetings are still conducted in much the same way (perhaps with a few people joining via Skype), and general management principles are very similar.
It’s been a source of much interest to us in the context of shaping AnswerHub, and we’ve written before about return on knowledge (ROK) as the new core business metric, how to minimize the cost of knowledge loss, and even how to shift toward greater collaboration (necessary in a knowledge economy).
How Our Thinking About Work Should Change
First of all, you need to re-contextualize your thinking: the processes and products you roll out are very important, but the people in your organization are more important.
It’s not necessarily that Johnny or Sue is essential to the organization — although they definitely might be, and probably are — but it’s that the knowledge they have about the organization and their role within it is crucial.
If you lose either of those employees — especially to a competitor — you’ve lost that knowledge and, given a tight hiring climate, you’re not guaranteed to get it back with a new hire (and if you do, that could be a matter of six-to-eight months).
People in senior management are often reluctant to look at things along these lines because while there have been efforts to tie employee departure and knowledge loss to specific bottom-line ROI, there isn’t conclusive science there yet. As a result, people can often be viewed as interchangeable.
That idea isn’t true, and it should never be embraced. That said if you’re in a very conventional, old-school organization that’s still transitioning to some of the expectations of a knowledge economy, the only way to approach this potential knowledge loss challenge is to think about smarter knowledge management.
In other words, what the different teams in your organization know cannot simply live on e-mail, Dropbox, Office, Google, or in their heads. It needs to live in a shared space where people can discuss it and give feedback; the idea of biased information sampling — which can doom meetings — needs to be reduced.
One big reason why we talk about ROK and knowledge loss a lot here is simple demographics: even if you believe the crash of 2008 postponed many retirement plans (which it likely did), the baby boomer generation will still be predominantly aged out of the workforce within 12-15 years. That’s a tremendous amount of potential knowledge loss and contextual loss (experiences, etc.) for an organization, even one with a generally-low overall turnover rate.
That’s why we think — and other experts think — that businesses who really focus on the transfer of knowledge (and what they’re getting back from that knowledge) will be set up the best for the future.
We won’t go deep on the sales pitch side here, but just understand this: We have three basic use cases in which we can help your organization — team collaboration and knowledge management, which we primarily discussed in this post, is one. We can also help you with customer support and Q&A communities, which can be used in many ways (including, of course, knowledge management and customer support!).
The Bottom Line
The knowledge economy has changed a lot about how we work, and perhaps more importantly, how we need to think about work. The demographic shifts in America will fill in the gaps around that. If you’re not thinking about how to keep knowledge in your business and transfer it to the right channels, you need to be. Keep checking this blog for context on that — and if interested in talking to us, send us an email or give us a call. We think about these issues all day and would be happy to help you.