« Knowledge Management Measuring Knowledge Management in the Business Sector FIRST STEPS This book offers a synthetic view of the results of the first systematic international survey on knowledge management carried out by national statistical offices in Canada, Denmark, France and Germany Visit www.statcan.ca for more information about Statistics Canada OECD’s books, periodicals and statistical databases are now available via www.SourceOECD.org, our online library This book is available to subscribers to the following SourceOECD themes: Education and Skills Science and Information Technology Statistics Sources and Methods Ask your librarian for more details of how to access OECD books on line, or write to us at SourceOECD@oecd.org Measuring Knowledge Management in the Business Sector Co-published with Statistics Canada Knowledge Management Knowledge management involves any activity related to the capture, use and sharing of knowledge by an organisation Evidence shows that these practices are being used more and more frequently and that their impact on innovation and other aspects of corporate performance is far from negligible Today, there is a recognition of the need to understand and to measure the activity of knowledge management so that organisations can be more efficient and governments can develop policies to promote these benefits FIRST STEPS w w w o e c d o rg -:HSTCQE=VUUW[]: ISBN 92-64-10026-1 96 2003 02 P Knowledge Management Measuring Knowledge Management in the Business Sector FIRST STEPS © OECD, 2003 © Software: 1987-1996, Acrobat is a trademark of ADOBE All rights reserved OECD grants you the right to use one copy of this Program for your personal use only Unauthorised reproduction, lending, hiring, transmission or distribution of any data or software is prohibited You must treat the Program and associated materials and any elements thereof like any other copyrighted material All requests should be made to: Head of Publications Service, OECD Publications Service, 2, rue André-Pascal, 75775 Paris Cedex 16, France Measuring Knowledge Management in the Business Sector: First Steps ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT STATISTICS CANADA ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States The following countries became members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000) The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention) STATISTICS CANADA Statistics Canada, Canada's central statistical agency, has the mandate to "collect, compile, analyse, and publish statistical information relating to the commercial, industrial, financial, social, economic and general activities and condition of the people of Canada." The organisation, a federal government agency, is headed by the Chief Statistician of Canada and reports to Parliament through the Minister of Industry Statistics Canada provides information to governments at every level and is a source of statistical information for business, labour, academic and social institutions, professional associations, the international statistical community, and the general public This information is produced at the national and provincial levels and, in some cases, for major population centres and other sub-provincial or "small" areas The Agency fosters relations not only within Canada but also throughout the world, by participating in a number of international meetings and professional exchanges Statistics Canada conducted the pilot survey on Knowledge Management Practices as part of an international initiative headed by the Centre for Educational Research and Innovation (Organisation for Economic Co-operation and Development) Canada was the lead country piloting the survey Other countries that in 2001 undertook pilot surveys or questions based on the contents of the Knowledge Management Practices' questionnaire were Denmark, Germany and France Publié en français sous le titre : Mesurer la gestion des connaissances dans le secteur commercial : premiers résultats © Organisation for Economic Cooperation and Development (OECD), Paris and Minister of Industry, Canada, 2003 Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, tel (33-1) 44 07 47 70, fax (33-1) 46 34 67 19, for every country except the United States In the United States permission should be obtained through the Copyright Clearance Center, Customer Service, (508)750-8400, 222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online: www.copyright.com All other applications for permission to reproduce or translate all or part of this book should be made to OECD Publications, 2, rue André-Pascal, 75775 Paris Cedex 16, France FOREWORD Foreword A t the start of the 21st century, there is a recognition of the need to understand and to measure the activity of knowledge management (KM) so that organisations, and systems of organisations, can what they better and so that governments can develop policies to promote these benefits Facing such new emerging practices, economists, management scientists and statisticians have not yet much systematic evidence Among the various categories of knowledge-related investments (education, training, software, R&D, etc.), KM is one of the less known, both from a quantitative and qualitative point of view, as well as in terms of costs and economic returns Thus, there is certainly a need to know more on this new knowledge-based activities; on the current state of KM as an organisational process within various kinds of companies and sectors; on the variety of methods and tools that are developed; and on the economic effects of KM practices that are actually observed To achieve those objectives, the Center for Educational Research and Innovation (OECD) and Statistics Canada have set up a working group com prising representatives from the statistical offices of Canada, France, Italy, the Netherlands and Sweden and representatives from research bodies in Australia, Denmark, Germany and Ireland The working group has met four times since February 2001, in Copenhagen, Ottawa, Paris and Karlsruhe A questionnaire was devised during the course of the four meetings and the information deriving from the first pilot studies was discussed This questionnaire includes a survey on the use of 23 KM practices and is complemented with questions on incentives for using KM practices, results, responsibilities, etc The questionnaire includes many informal management practices in order to accommodate how micro-firms are managing knowledge For countries willing to carry out their own national surveys, two kinds of strategies were possible: either implementing the whole survey as a pilot study or lodging few questions on KM in an existing and regular questionnaire, such as the Community Innovation Survey While the first option gives the opportunity to really test the KM questionnaire and to collect information related to a large range of issues and problems, the second option has proven to be very useful for countries where starting a new survey is a difficult task for administrative, political or technical reasons MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 FOREWORD This book presents a synthetic view of the results of the surveys carried out in Canada, Denmark, France and Germany, as well as statistical analysis about various issues dealing with KM and a policy discussion This foreword cannot be closed without stressing the extent to which producing this book has itself been a successful experiment in knowledge management Especially involved were two teams that were geographically very far apart: the OECD team (D Foray, K Larsen, S Vincent-Lancrin) and the Statistics Canada team (M Bordt, L Earl and F Gault) The teams built up an impetus which was greatly aided by E Kremp, S Lhuillery and J Mairesse (France), J Edler and F Meyer-Krahmer (Germany), W Strømsnes (Denmark), C Noonan (Ireland), G Perani (Italy), S Nousala (Australia), S Pronk (Netherlands), L Prusak (United States), J Morgan and P Quintas (United Kingdom) and A Sundström (Sweden) All of them deserve thanks The book is published on the responsibility of the Secretary-General of the OECD MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 TABLE OF CONTENTS Table of Contents Part I Frameworks Chapter Measurement of Knowledge Management Practices Dominique Foray and Fred Gault 1.1 Introduction 1.2 Knowledge Management: What is New? 1.3 Knowledge Management as a Topic for Empirical Studies: Opening another Black Box 1.4 From Good Case Studies to Systematic Surveys 1.5 Why, How and So What? 1.6 Knowledge Management Surveys 1.7 Three Main Tasks of a Knowledge Management Survey 1.8 A Brief History of the OECD-Statistics Canada Project and a First Look at the Results 1.9 Outline of the Book Bibliography Managing Knowledge in Practice Paul Quintas 2.1 Introduction 2.2 Key Knowledge Processes 2.3 Getting Knowledge Management Started 2.4 Limits and Potentials of Technological Solutions 2.5 Knowledge Capture 2.6 Knowledge Sharing 2.7 Auditing and Exploiting Intellectual Capital 2.8 Cross-boundary Knowledge Acquisition and Integration 2.9 Conclusions Bibliography 11 12 13 16 18 19 21 22 23 24 26 Chapter MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 29 30 34 35 36 38 40 42 44 48 50 TABLE OF CONTENTS Part II Country Reports Chapter Are we Managing our Knowledge? The Canadian Experience Louise Earl 3.1 Highlights 3.2 Introduction 3.3 Survey Background/Overview 3.4 Definition of Knowledge Management 3.5 Knowledge Management Practices in Use 3.6 Reasons Why Knowledge Management Practices Were Adopted 3.7 Knowledge Management Practices Most Effective for Improving Workers’ Skills and Knowledge 3.8 One Quarter of Firms Had Dedicated Budgets for Knowledge Management 3.9 Knowledge Management – Important Business Practices Annexes Bibliography The Management of Knowledge in German Industry Jakob Edler 4.1 Introduction: Filling Knowledge Gaps on Industrial Knowledge Management in Germany 4.2 Methodology: The Sample 4.3 The Employment of KM Practices in German Industry 4.4 What Kind of KM Practices 4.5 The Driving Forces of Knowledge Management: Motivation Patterns in German Industry 4.6 Effects of Knowledge Management 4.7 The Institutionalisation of KM and its Meaning for the Use of Knowledge Management 4.8 Knowledge Management and its Role within Innovation Management 4.9 Concluding Summary: Only First Steps towards Filled Gaps Annexes Bibliography 55 56 57 57 58 59 64 67 69 72 76 85 Chapter 89 90 92 94 95 98 104 108 109 112 116 118 MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 TABLE OF CONTENTS Chapter The Promotion and Implementation of Knowledge Management – A Danish Contribution Anja Baastrup and Wenche Strømsnes 5.1 Introduction 5.2 Some Overall Results 5.3 Measuring, Controlling and Documenting Effectiveness 5.4 Inspiration for Top Managers – Content and Process 5.5 What can Top Management Expect from the Environment? 5.6 Further Research Annexes Bibliography Knowledge Management, Innovation and Productivity: A Firm Level Exploration Based on French Manufacturing CIS3 Data Elizabeth Kremp and Jacques Mairesse 6.1 Introduction 6.2 Diffusion of Knowledge Management 6.3 Complementarity of Knowledge Management Practices 6.4 Knowledge Management and Innovation 6.5 Knowledge Management and Productivity 6.6 Conclusion Annex Bibliography 119 120 121 125 127 130 131 134 141 Chapter Knowledge Management: Size Matters Louise Earl and Fred Gault 7.1 Introduction 7.2 Practices 7.3 Reasons for Using KM Practices 7.4 Results of Using KM Practices 7.5 Incentives to Use KM 7.6 Moving from Micro to Large 7.7 Intensity of KM Use 7.8 Specific KM Applications 7.9 What was Learned? 7.10 Where Next? Annex Bibliography 143 144 146 151 152 159 161 164 168 Chapter MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 169 170 172 174 176 177 178 178 178 181 181 183 186 TABLE OF CONTENTS Part III Methodological Aspects Chapter A Word to the Wise – Advice for Conducting the OECD Knowledge Management Survey Louise Earl and Michael Bordt 8.1 Introduction 8.2 Questionnaire Content 8.3 The Questions 8.4 Conducting the Survey 8.5 Analysing and Reporting the Results 8.6 Conclusions Bibliography Chapter Knowledge Management Practices Questionnaire OECD 189 190 190 191 196 199 201 203 205 Conclusion D Foray and F Gault 213 List of Authors 219 MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 III.9 KNOWLEDGE MANAGEMENT PRACTICES QUESTIONNAIRE Definition Knowledge Management Knowledge management involves any activity related to the capture, use and sharing of knowledge by the organisation E.g circulation of information across divisions of the organisation, dedication of resources to obtain external knowledge, encouragement of experienced workers to transfer their knowledge to new or less experienced workers, preparation of written documentation such as lessons learned, training manuals, good work practices, articles for publication, etc PLEASE COMPLETE AND RETURN THIS QUESTIONNAIRE WITHIN 10 DAYS OF RECEIPT USING THE ENVELOPE PROVIDED KNOWLEDGE MANAGEMENT PRACTICES This section measures the use of formal, informal and everyday knowledge management practices Using the tables below, please indicate the use your firm or organisation makes of each of the knowledge management practices listed Use the following response categories in your answers: ● In Use Before 1999 ● Used Since 1999 ● Plan to Use in the Next 24 months ● Not in use / Not Applicable A Firm or organisation began regularly using this practice before 1999 A Firm or organisation has regularly used this practice since 1999 A Firm or organisation intends to regularly use this practice in the next 24 months A Firm or organisation not use and not intend to regularly use this practice in the next 24 months ● Don’t know For the purposes of this survey, the term workers includes your regular workers (employees) as well as managers, executives, partners, directors, and persons employed under contract 206 MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 III.9 KNOWLEDGE MANAGEMENT PRACTICES QUESTIONNAIRE ; Check ONE response for each item Knowledge Management Practices Within your Firm or Organisation 1.1 C facilitating collaborative work by projects teams that are physically separated (“virtual teams”) 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U Training and Mentoring Your firm or organisation: A provides formal training related to knowledge management practices B provides informal training related to knowledge management C uses formal mentoring practices, including apprenticeships D encourages experienced workers to transfer their knowledge to new or less experienced workers E encourages workers to continue their education by reimbursing tuition fees for successfully completed workrelated courses F offers off-site training to workers in order to keep skills current 1.3 Used Plan to Use Not in use / Don’t Since in the Next Not Know 1999 24 Months applicable Communications In your firm or organisation workers share knowledge or information by: A regularly updating databases of good work practices, lessons learned or listings of experts B preparing written documentation such as lessons learned, training manuals, good work practices, articles for publication, etc (organisational memory… ) 1.2 In Use Before 1999 Policies and Strategies Your firm or organisation: A has a written knowledge management policy or strategy B has a values system or culture promoting knowledge sharing C uses partnerships or strategic alliances to acquire knowledge 1.4 Knowledge capture and acquisition Your firm or organisation regularly: A uses knowledge obtained from other industry sources MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 207 III.9 KNOWLEDGE MANAGEMENT PRACTICES QUESTIONNAIRE Knowledge Management Practices Within your Firm or Organisation B uses knowledge obtained from public research institutions C dedicates resources to obtaining external knowledge D uses the Internet to obtain external knowledge E encourages workers to participate in project teams with external experts 1.5 In Use Before 1999 Used Plan to Use Not in use / Don’t Since in the Next Not Know 1999 24 Months applicable 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U 1U 2U 3U 4U 5U Are there any knowledge management practices that your firm or organisation uses that we have not included in this survey? U No U Yes, please specify 1102 - REASONS FOR USING KNOWLEDGE MANAGEMENT PRACTICES This section measures the reasons for using knowledge management practices Please indicate the level of importance you attribute to each reason for using the knowledge management practices currently in use in your firm or organisation ; Check ONE response for each item Reasons knowledge management practices are used in your firm or organisation 2.1 +++ ++ + – Not at all Not important applicable / –– – – – Don’t know Knowledge Integration / Sharing 1U 2U 3U 4U 5U 6U 7U B To accelerate and improve the 1U 2U 3U 4U 5U transfer of knowledge to new workers 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U A To help integrate knowledge within your firm or organisation C Following merger or acquisition to help integrate knowledge within your new firm or organisation D To ensure that knowledge resident in all international work sites is accessible to the entire firm or organisation 208 Critical MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 III.9 Reasons knowledge management practices are used in your firm or organisation + – F To improve sharing or transferring of U U U U U knowledge with partners in strategic alliances, joint ventures or consortia 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U Knowledge capture and control J To protect your firm or organisation from loss of knowledge due to workers’ departure K To identify and/or protect strategic knowledge present in your firm or organisation L To capture workers’ undocumented knowledge (know-how) Information Management M To avoid information overload problems within your organisation N To help managers to focus their attention to key information Human Resource Management O To train workers to meet strategic objectives of your firm or organisation P To train workers to develop their human resources Q To encourage managers to share knowledge as a tool for professional promotion of their subordinates R To increase worker acceptance of innovations 2.5 ++ 7U I To improve the capture and use of knowledge from sources outside your firm or organisation 2.4 +++ Not at all Not important applicable / –– – – – Don’t know 6U H To promote sharing and transfer of knowledge with customers 2.3 Critical E To ease collaborative work of projects U U U U U or teams that are physically separated (i.e different work sites) G To promote sharing and transfer of knowledge with suppliers 2.2 KNOWLEDGE MANAGEMENT PRACTICES QUESTIONNAIRE External reasons S To update your firm or organisation on knowledge management tools or practices used by competitors MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 209 III.9 KNOWLEDGE MANAGEMENT PRACTICES QUESTIONNAIRE RESULTS OF USING KNOWLEDGE MANAGEMENT PRACTICES This section measures the results of using knowledge management practices In the table below, please indicate the level of effectiveness you attribute to knowledge management practices currently in use in your firm or organisation as regards the following objectives ; Check ONE response for each item Results of using knowledge management practices Critical +++ ++ + – Not at all Not important applicable / –– ––– Don’t know Using knowledge management practices A Increased our ability to capture knowledge from public research institutions B Increased our ability to capture knowledge from other businesses C Improved skills and knowledge of workers D Improved worker efficiency and productivity E Increased our adaptation of products or services to client requirements F Helped us add new products and services G Alleviated the impacts of workers departures 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U 1U 2U 3U 4U 5U 6U 7U RESPONSIBILITY FOR KNOWLEDGE MANAGEMENT PRACTICES Your firm or organisation U Does not have explicit KM function(s) but knowledge sharing is an important part of the culture UHas a chief knowledge officer or a unit or function mainly responsible for knowledge management Please specify - 210 MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 III.9 KNOWLEDGE MANAGEMENT PRACTICES QUESTIONNAIRE SPENDING ON KNOWLEDGE MANAGEMENT PRACTICES Does your firm or organisation have a dedicated knowledge management budget? U Yes U No EMPLOYMENT STRUCTURE Your firm or organisation ; Check all that apply U has multiple work sites U is part of an international company U has been involved in a major acquisition or merger in the last three years For each category listed below, please indicate the range that best represents the current number of workers in your firm or organisation Please include your regular workers (employees) as well as managers, executives, partners, directors, and persons employed under contract Employment in country Employment outside of country Number of full-time equivalent workers in COUNTRY (“Full-time equivalents” represents the number of person-years.) Number of full-time equivalent workers outside of COUNTRY (exclude COUNTRY -based workers) 01 U 01 U 03 U 20-49 03 U 20-49 ; Check ONE response only 02 U 1-19 04 U 50-99 ; Check ONE response only 02 U 1-19 04 U 50-99 05 U 100-249 05 U 100-249 07 U 500-1,999 07 U 500-1,999 06 U 250-499 08 U 2,000 + 06 U 250-499 08 U 2,000 + MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 211 ISBN 92-64-10026-1 Measuring Knowledge Management in the Business Sector © OECD/MINISTER OF INDUSTRY, CANADA, 2003 Conclusion by D Foray and F Gault This chapter draws conclusions of the previous chapters It stresses the importance on how to publish diligently these initial results as well as methodological advices and the tools which have been developed in order to stimulate, encourage and help new countries to proceed with further tests and experiments, while using the available statistical framework It also opens broader perspectives about the importance of knowledge management and its measurement in the context of the knowledge-based economies MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 213 CONCLUSION This book is not a Manual in the sense of the famous Frascati and Oslo Manuals, although it does contain a questionnaire and a methodological guide for a statistical survey The production of a Manual marks the end of the trial, test and pilot study period and moves the survey forward into the stability – at least temporary – of the concepts and categories, questions and methodology of the statistical survey It is also the phase when certain basic assumptions concerning the link between the purpose of the survey (R&D, for example) and performance have become certainties shared by the community of experts The survey on knowledge management has obviously not yet reached that phase Tests and further studies will be needed in many countries, and the findings will have to be assessed and evaluated by broader expert groups in the international organisations concerned Also, only the passage of time, i.e the slow process whereby practitioners, researchers and decision-makers b e co me fam ilia r w ith the p ctices a n d ch alleng es o f kn ow ledg e management, will in the end result in a certain standardisation of the terms and categories “Early tools and first figures” Yet it would have been unwise to wait for the standardisation phase before publishing and circulating the tools used in the survey and the initial findings, one of the most significant results of the project being the demonstration that knowledge management is measurable and that aggregate statistics can be produced This was by no means clear at the beginning when the first versions of the survey questions were being tested in interviews, so it was vitally important to demonstrate that statistical measurement was feasible in order to encourage other countries and other experts to take part What is more, waiting for the age of maturity for too long could very well be like waiting for Godot… who never comes! The slow maturing of the subject matter and the gradual standardisation of the tools and concepts cannot happen spontaneously, being processes that are very much driven by the first trial surveys, the initial definitions proposed, the preliminary results obtained and all the reactions and discussions that this pioneering work may generate This is why it is essential not to wait to be in a position to produce a Manual before publishing and circulating the “early tools and first figures” arrived at 214 MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 CONCLUSION with the help of these tools The results should provide the encouragement to take the experiment further, in other countries, and to reconsider the questionnaire in the light of new, developing sets of problems – in short, to continue to diversify the experiments and trials The discovery process, which is set to go on for a little while yet, will however have to be counterbalanced by initial efforts to achieve a degree of stabilisation, for example by inviting certain countries that are already involved to repeat the experiment with the same questionnaire in one or two years’ time, or else by underlining the questions and terminology that seem to be gathering momentum as essential components of the future standard survey It is this conflict between diversity and standardisation that the experts in charge of the survey in future years will have to manage to the best of their ability It is also important not to wait too long before publishing this research in that some of the findings are clear and very meaningful for political and economic decision-makers How could it be thought that the correlations established between the intensity of knowledge management, innovation and productivity would not trigger considerable debate in innovation policy circles? For nearly years now, discussion has been focusing on the famous “R&D gap” (between the United States and Japan on the one hand and Europe on the other) which has prompted the European Community to set a target for domestic R&D expenditure of per cent of GDP by 2010 Without challenging the relevance of the target (which is confirmed by all the empirical and theoretical studies showing the great magnitude of the positive externalities generated by R&D), it is nevertheless reasonable to think that the initial findings concerning the correlation between knowledge management, innovation and productivity ought to fuel the debate and prompt people to think about the possible existence of a “KM gap” as an explanation for some of the differences in innovation and productivity performances between the major OECD regions What is more, this fundamental finding is itself informed by a whole series of other findings on the conditions surrounding the setting up of knowledge management policies, size and sector effects, and the necessary compatibility between the different practices themselves which provide a solid and detailed basis for implementing coherent knowledge management support policies It was also important to bring to the attention of the public sector an initial overview of the rapid changes that the private sector is bringing about in the area of knowledge management It is now quite clear that the renewal and regeneration of the various components of the public sector essentially involve adopting and introducing new methods of knowledge management, combined with efficient use of ICTs (OECD, 2003; Foray and Hargreaves, 2003) Yet, as an education sector specialist has written: “business has accumulated considerable know-how in applying new technologies to a wide range of MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 215 CONCLUSION situations, supporting change to both process and management systems This knowledge can be adapted to the particular needs of the education and training system.” (Van Burskirk and Lee, 2001) Circulating our findings to public sector experts and practitioners is thus of particular importance With these various points in mind, it may be time for the indicators related to the management of knowledge to be adopted by one or more of the OECD expert committees dealing with productivity, technological and organizational change as well as public management A key competence: knowing how to manage knowledge The fact that this survey originated, in collaboration with Statistics Canada, in the OECD Education Directorate’s CERI is not without significance Researchers and decision-makers in education have to contend with an enigma: is it possible to identify any real discontinuities in terms of competences and skills that people need to have in order to live and prosper in the knowledge-based economy? There is something of a paradox here Despite all the fractures and shocks that can be observed at the economic and technological level, competences remain remarkably stable “How old are new skills? asked B Pont and P Werquin of the Education Directorate recently “The competences required in the knowledge economy are not necessarily new With the exception of ICT skills, they are hardly cutting edge” (Pont and Werquin, 2001) So the famous “soft skills” – of leadership, the ability to work in a team, learning to learn, the ability to communicate and analytical skills – are not new and the craftsman in the Middle Ages must have possessed much the same skills (Berthold and Fehn, 2002) It is our hypothesis that knowing how to manage knowledge is a generic form of the new competences required and that taking it as such makes it possible to deduce a considerable number of skills that everyone needs to develop (Romer, 1995): sharing, sorting and memorising, communicating, codifying, retrieving documents, etc This general concept – knowing how to manage knowledge – is a heuristic procedure for identifying and classifying the new skills required and establishing what education programmes are best suited to the knowledge economy The new challenges for knowledge management: using ICTs mastering complexity and reinventing the company The said heuristic procedure points to a hiatus by comparison with the knowledge and competences required during previous periods, the hiatus being represented by information and communication technologies (ICTs) combined with a systemic approach to management In the 21st century, ICTs are making it easier for big firms to acquire information and share it between knowledge workers Never before have there been such opportunities to collect information on a large number of operational areas (inputs, staff, energy, raw materials and 216 MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 CONCLUSION information, processing and manufacturing techniques, background information on customer purchases and preferences) That information, combined with the experience of managers throughout the firm – from the mail sorting department to the boardroom – is a source of information that has to be managed if it is to generate value This means adopting a strategic approach to knowledge management, based on an efficient infrastructure In small businesses, on the other hand, all the staff can share the firm’s knowledge more easily, without any need for a complex technological infrastructure It is no surprise that the studies presented should have found correlations between knowledge management, productivity and innovation Nor is it any surprise to find that knowledge management is linked to the size of the firm, whereas the sectoral variable is of less significance As firms grow in size, management becomes more complex and the need for efficient knowledge management also increases Without that capacity, the ability to bring new products to the market and develop new processes for producing and delivering the said new products is reduced, and any such reduction in opportunities to innovate has far-reaching economic and social implications – in particular because it is big firms that are responsible for mass production in the industrialised economies Knowledge management covers not only such areas as inputs, processing, outputs and customers, but extends to the commercial environment in which the firm exists This environment nowadays includes tax laws, consumer protection in the countries in which the firm operates or exports, environmental regulations, energy costs, the supply of skilled employees, labour market legislation and changes in consumer preferences – linked in part to population changes As a result of the collapse of Enron, there are now also issues such as risk management and confidence vis-à-vis employees, customers, shareholders and governments Internal and external factors such as these are prompting firms to evolve all the time and adjust, or even fundamentally change their views (Dierkes, 2002) If policy-makers want to learn more on the basis of identifying “best practices”, then work on measuring and understanding knowledge management has to continue By way of conclusion The research presented in this publication can influence certain private or public policy-making circles However, it will take more than one exposure to ensure that the activities of knowledge management are measured as part of official statistics, and for those statistics to be used to effect change Like production teams or football teams, management teams learn by doing, by collecting knowledge from a variety of sources and applying it in an experimental manner Group learning is interactive and takes time This book is just the first interaction MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 217 CONCLUSION Bibliography Berthold, N and R Fehn (2002), “Labor Market Policy in the New Economy”, in H Siebert, Economic Policy Issues of the New Economy, Springer Dierkes, M (2002), “Visions, technology and organizational knowledge: an analysis of the interplay between enabling factors and triggers of knowledge generation”, in J de la Mothe and D Foray (eds.), Knowledge Management in the Innovation Process, Kluwer Academic Publishers, Boston Foray, D and D Hargreaves (2003), “The production of knowledge in different sectors : a model and some hypotheses”, London Review of Education, vol.1, n°1 OECD (2003), Conference on the “Learning Governement”, PUMA/OECD, Paris, 34 February 2003 Pont, B and P Werquin (2001), “How old are new skills ?”, Observer, n°225 Romer, P (1995), “Beyond the knowledge worker”, Worldlink, January/February Van Burskirk, E M and D Lee (2001), “Knowledge management and employees”, Lline, 218 MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 ISBN 92-64-10026-1 Measuring Knowledge Management in the Business Sector © OECD/MINISTER OF INDUSTRY, CANADA, 2003 List of Authors A Baastrup, Centre of Management, Denmark M Bordt, Statistics Canada, Science, Innovation and Electronic Information Division, Ottawa, Canada L Earl, Statistics Canada, Science, Innovation and Electronic Information Division, Ottawa, Canada J Edler, Fraunhofer Institute for Systems and Innovation Research, Karlsruhe, Germany D Foray, OECD, Paris, France F Gault, Statistics C anada, Science, Innovation and Electronic Information Division, Ottawa, Canada E Kremp, SESSI, Ministère de l’Économie, des Finances et de l’Industrie, Paris, France J Mairesse, CREST/INSEE, Paris, France P Quintas, Open University Business School, London, United Kingdom W Strømsnes, Centre of Management, Denmark MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64-10026-1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 219 OECD PUBLICATIONS, 2, rue André-Pascal, 75775 PARIS CEDEX 16 PRINTED IN FRANCE (96 2003 02 P) ISBN 92-64-10026-1 – No 53127 2003 ... 14 3 14 4 14 6 15 1 15 2 15 9 16 1 16 4 16 8 Chapter MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64 -10 026 -1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 16 9 17 0 17 2 17 4 17 6 17 7 17 8... Bibliography 11 12 13 16 18 19 21 22 23 24 26 Chapter MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64 -10 026 -1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 29 30... MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64 -10 026 -1 – © OECD/MINISTER OF INDUSTRY, CANADA, 2003 PART I Frameworks MEASURING KNOWLEDGE MANAGEMENT IN THE BUSINESS SECTOR – ISBN 92-64 -10 026-1