Measuring knowledge management and the economics of information

Abstract

The question of how to measure knowledge management (KM) is a fraught one, with several layers of problems, which can be roughly categorised into two areas. Firstly, there is the question of what will be measured – knowledge in people\'s heads or creation of new knowledge? If knowledge itself is not the object of management effort, then it need not be measured; should we measure instead the effort of KM itself – the systems and procedures that are put into place to enable KM? Or, if KM is a means to an end, what are the ends? The ends may be competitive advantage as expressed in innovation, increased profit or development of intellectual capital. The second major problem is concerned with how these attributes, actions and characteristics can be measured. Knowledge itself is intangible and ineffable; increased profit presents few problems as it can be expressed in numerical financial terms. There are in addition a range of different methodologies than can be used to ensure that the results have integrity. The issue becomes more complex when we place KM in the context of the present ‘Information\' or ‘Knowledge\' economy. The foundation of industrialized economies has shifted from natural resources to intellectual assets. What does this mean, and how is the new economy different?

Innovation No.27 December 2003: 1-12