Knowledge Economy: The Indian Challenge


Edited by: Ashoka Chandra & M. K. Khanijo

  • Citations
  • Add to My List
  • Text Size

  • Chapters
  • Front Matter
  • Back Matter
  • Subject Index
  • Part 1: Directions of Change towards a Knowledge Economy

    Part 2: Trends and Issues in Formulating Policy Initiatives and Developing Strategies of Change Management

    Part 3: Human Resource Development for the Knowledge Economy

    Part 4: Scope and Significance of Knowledge, Technology, R&D and Innovation Management for the Emerging Knowledge Economy

    Part 5: Creating a Network of Knowledge Institutions

    Part 6: Application of Knowledge Management for Achieving Social Objectives

  • Copyright

    View Copyright Page

    List of Tables

    List of Figures

    List of Abbreviations

    AAArthur Anderson
    ADBAsian Development Bank
    AIAppreciative Inquiry
    AIDSAcquired Immuno Deficiency Syndrome
    APOAsian Productivity Organization
    APQCAmerican Productivity & Quality Center
    ASEANAssociation of Southeast Asian Nations
    ATIAdministrative Training Institutions
    BPOBusiness Process Outsourcing
    CGIARConsultative Group for International Agricultural Research
    CoPCommunities of Practice
    CRMCustomer Relationship Management
    CSIRCouncil of Scientific and Industrial Research
    CTQCritical to Quality
    DBEDigital Business Ecosystem
    DEDigital Ecosystem
    DEALDigital Ecosystem for Agriculture and Rural Livelihood
    DITDepartment of Information Technology, Government of India
    DFIDDepartment for International Development
    DoEDepartment of Electronics, Government of India
    ECILElectronics Corporation of India Limited
    ELCEvolutionary Learning Community
    ERPEnterprise Resource Planning
    ESPExtended Sensory Perception
    EUEuropean Union
    FDIForeign Direct Investment
    FSPFuture Search Process
    GBGoverning Body
    GDLNGlobal Development Learning Network
    GDPGross Domestic Product
    GIANGujarat Grassroots Innovation Augmentation Network
    GNPGross National Product
    HCLHindustan Computers Limited
    HYVHigh-Yielding Variety
    IBAIndian Business Academy
    IBMInternational Business Machines
    ICCInternational Chamber of Commerce
    ICTInformation and Communication Technologies
    IDMInternational Data Machines
    IFFCOIndian Farmers Fertiliser Cooperative Limited
    IIFTIndian Institute of Foreign Trade
    IIMIndian Institute of Management
    IISDInternational Institute of Sustainable Development
    IITIndian Institute of Technology
    IIM-AIndian Institute of Management-Ahmedabad
    IIT-BIndian Institute of Technology-Bombay
    IIT-MIndian Institute of Technology-Madras
    IIT-RIndian Institute of Technology-Roorkee
    IMFInternational Monetary Fund
    IMIInternational Management Institute, New Delhi
    IMTECHInstitute of Microbial Technology
    IMTTInnovation Management and Technology Transfer
    IOPIndustry-Originated Projects
    IPNInternational Production Network
    IPRIntellectual Property Rights
    ISPInternet Service Provider
    ISPIMInternational Society for Professional Innovation Management
    ITInformation Technology
    ITeSInformation Technology-enabled Services
    ITIIndustrial Training Institute
    IPInternet Protocol
    JICAJapan International Cooperation Agency
    KAMKnowledge Assessment Methodology
    KBCSKnowledge-Based Computer Systems
    KBDKnowledge-Based Development
    KEKnowledge Economy
    KEIKnowledge Economy Indicator
    KIBSKnowledge-Intensive Business Services
    KMKnowledge Management
    KMATKnowledge Management Assessment Tool
    KPOKnowledge Process Outsourcing
    KVKKrishi Vigyan Kendra
    LGDLarge Group Dynamics
    LGIPLarge-Group Interactive Process
    MBNQAMalcolm Baldridge National Quality Award
    MCManagement Council
    MCAMinistry of Company Affairs
    MCITMinistry of Communications and Information Technology, Government of India
    MNCMulti-National Company
    MNEMulti-National Enterprise
    NASSCOMNational Association of Software and Services Companies
    NEGPNational e-Governance Plan
    NEPNationally Evolved Projects
    NGONon-Governmental Organization
    NIDNational Institute of Design
    NIFNational Innovation Foundation
    NKCNational Knowledge Commission
    NMITLINew Millennium Indian Technology Leadership Initiative
    NPCNational Productivity Council
    NPONational Productivity Organization
    NREGPNational Rural Employment Guarantee Programme
    NSDPNet State Domestic Product
    OECDOrganisation for Economic Co-operation and Development
    OEMOriginal Equipment Manufacturer
    ORGOperations Research Group
    PABPerformance Appraisal Board
    PBTProfit Before Tax
    PCTPatent Cooperation Treaty
    PDCAPlan, Do, Check and Action
    PPPPublic Private Partnership
    PURAProviding Urban Amenities in Rural Areas
    RACResearch Advisory Council
    RCResearch Council
    R&DResearch and Development
    RPNRegional Production Network
    RTIRight to Information Act
    SAARCSouth Asian Association for Regional Cooperation
    S&TScience and Technology
    SDPState Domestic Product
    SGDSmall Group Dynamics
    SIDASwedish International and Development Agency
    SIDOSmall Industries Development Organisation
    SIROScientific and Industrial Research Organization
    SMESmall and Medium Enterprise
    SWOTStrengths, Weaknesses, Opportunities and Threats
    TABTechnology Advisory Board
    TCSTata Consultancy Services
    TNCTransnational Corporation
    ToTTransfer of Technology
    TRIPSTrade-Related Intellectual Property Rights
    UNUnited Nations
    VLSIVery Large Scale Integrated Networks
    WANWide Area Network
    WIPOWorld Intellectual Property Organization
    WTOWorld Trade Organization


    It has been a long journey from an agricultural economy to an industrial economy. The transformation took a few centuries. The increasing pace of change is amply reflected in the next step, that is, development of information technology (IT)-based economy. The IT revolution has witnessed exponential growth of computing power. Moore's Law postulates that the performance of integrated circuits doubles every 18 to 24 months. That is how it has been over the last four decades. Such a record of technological development—30 doublings in computational performance over 40 years—is unprecedented in the history of mankind. While such fast changes throw up immense opportunities, they also present ‘emerging systemic risks’ resulting from interactions between complex social, technological and economic systems. Social systems have their own inertia and can adjust to slow changes easily. For adjusting to fast changes, proactive policies are needed to expedite changes in society. In the absence of such policies, growth cannot be inclusive. Disparities between the ‘haves’ and the ‘have-nots’, manifesting in the rich–poor divide, rural–urban divide, digital divide and the like, are giving rise to serious non-participation in the development process and conflicts within the countries as well as amongst them.

    In the globalized knowledge economy as it has emerged till now, corporates use innovation as an integral part of their strategy to deal with competition, diversification of products and services, quality, market share and profits. Innovation at the corporate level is not limited to technology; it extends to marketing, finance, supply chain and management. With the world economy undergoing a process of profound restructuring in the recent times, changes in the economic scene are not confined to production, distribution and delivering value to the customers with the application of information and communication technologies (ICT). A managerial revolution is also under way influencing quality control, team production, supply chain management and customer relations. Yet another development of consequence is the unhindered flow of capital across national boundaries along with diminished role of labour, as understood conventionally, as a factor of production. The emergence of multi-lateral blocs, chief amongst them being the World Trade Organization (WTO), has facilitated harmonization of economic policies across nations and increased the momentum of change.

    Human resources have become increasingly more important as conventional labour is being replaced by knowledge workers who can create, utilize and distribute knowledge. The output is shifting more and more towards knowledge goods and knowledge-based services. All of this implies a profound change in the role of labour, and is putting knowledge workers at the centre of all economic and social developments. The main challenge, therefore, is creating a knowledge society where workers would not be mere labour but knowledge workers—producers and users of knowledge.

    These developments have been driving the nations in an increasing manner to maintain competitiveness while ensuring the welfare of their people. Changes taking place at the corporate level regarding acquisition, sharing and utilization of knowledge have been having significant implications for public policy at the national level. It has become important to define the public role of knowledge in a knowledge economy. It has also become important to understand the role of public systems in the generation, dissemination and application of knowledge for commercial as well as non-commercial segments of activities.

    Thus, national policies, especially in India, have to sharpen the focus on enhancing productivity and growth rate through increased knowledge-intensive economic activities with corresponding emphasis on social development. In the attainment of this objective, India has to utilize the scientific, technological and entrepreneurial talents of its people, which are recognized as being immense. We have to re-orient our management of innovation and knowledge which are important drivers of economic growth and social development. Knowledge management is thus emerging as the key strategy for ensuring competitiveness and social well-being.

    Knowledge economy throws up its own challenges, not the least being the fast pace at which it is developing. Since we are still trailing the developed world, we have to run faster if we do not wish to be left behind. We have to map the directions in which the economy is moving and identify changes that must be brought about for the knowledge economy to be competitive. We must prepare the human resource for the knowledge economy by re-orienting the educational and training systems. We must build institutions and institutional linkages, national as well as international, appropriate for knowledge economy. Policies, resources and efforts devoted to building a competitive knowledge economy would be justified only if the benefits accrue to the society, that is, the people of the country.

    Precisely with the above considerations in mind, the Ministry of Communications and Information Technology (MCIT) has launched a national initiative for the development of national competitiveness in a knowledge economy. The Ministry awarded a project on this issue to a group of four eminent institutions, namely, the Indian Institutes of Technology at Chennai and Roorkee, the National Productivity Council (NPC) and the International Management Institute (IMI). In late 2006, a national symposium was organized as a part of the project on ‘Competitiveness in a Knowledge Economy: Imperatives of Change’. Distinguished experts participated in the symposium and a number of papers were presented and discussed. It was felt that the collection of these papers would form a valuable resource material for those who wish to study the subject and take up further work on it. This volume made use of the papers presented at the symposium and supplemented them with a few more to add value to the endeavour.

    We are grateful to MCIT for providing financial assistance for the project that facilitated the organization of the symposium. We wish to thank the contributors of the papers included in this volume. We received the cooperation and support of the four participating institutions of the project and would like to record our appreciation of the same. Many others extended help of various kinds in this task; their assistance is duly acknowledged.



    AshokaChandra and M.K.Khanijo
    Concept of Knowledge

    Knowledge is defined as, ‘The fact or condition of knowing something with a considerable degree of familiarity through experience, association or contact.’ Michael Polanyi (1958/1998) provided an explanation of knowledge upon which models of knowledge creation have been built. He differentiated between explicit, tacit and implicit forms of knowledge. Explicit knowledge is that which is stated in detail and leaves nothing implied. It is termed ‘codified’ or ‘formal’ knowledge because it can be recorded. Tacit knowledge is that which is understood, implied and exists without being stated. It is informal, experiential and difficult to capture or share. It is knowledge that cannot be expressed.

    Central to Michael Polanyi's thinking was the belief that creative acts (especially acts of discovery) are shot through or charged with strong personal feelings and commitments, and hence the title of his most famous work, Personal Knowledge. As Michael Polanyi wrote in The Tacit Dimension, we should start from the fact that ‘we can know more than we can tell’ (Polanyi 1966). He termed this pre-logical phase of knowing as ‘tacit knowledge’. Tacit knowledge comprises a range of conceptual and sensory information and images that can be brought to bear in an attempt to make sense of something.

    Nonaka and Takeuchi (1995) argue that effective organizational knowledge creation best occurs through the spiral process where knowledge is converted from tacit to explicit in a continuous and dynamic cycle. It is when tacit knowledge and explicit knowledge interact that innovation occurs. Knowledge creation is facilitated by deliberately managing the cycle.

    Organizational knowledge creation begins with socialization, where individuals share experience and mental models. It develops into externalization when individuals use metaphors or analogies to articulate hidden tacit knowledge that is otherwise difficult to communicate. It moves into the combination phase for knowledge to be articulated, shared and expounded. Finally, individuals learn by doing and internalizing the new knowledge. The spiral begins again as the experience-based operational knowledge learned in the first cycle provides a larger knowledge base for continuous innovation and growth. It is this model that demonstrates how knowledge comes into action.

    Knowledge societies have the characteristic that knowledge constitutes a major input of any activity, particularly economic activities. Economic, social, cultural and all other human activities become dependent on a large volume of knowledge and information. Knowledge, in a knowledge society, becomes a major product as also a significant raw material.

    Knowledge management (KM) is about facilitating the process by which knowledge is created, shared and utilized. At the societal level, the aim is to apply the collective knowledge of the entire people to achieve specific societal goals. The knowledge society will investigate knowledge formation and communication processes in organizations from the perspective of the social sciences, investigate group decision-making processes from the perspective of the cognitive sciences to establish information systems that support the creation of knowledge including groupware and attempt to clarify the nature of knowledge through research on complex systems. The knowledge society will provide a fusion of knowledge from the social sciences, humanities, engineering and natural sciences while resourcing knowledge of nature and knowledge available with individuals, organizations and society. It will approach various issues from the perspective of knowledge, a new point of view, without regard to the borders of the traditional disciplines.

    Knowledge is emerging as an important parameter in the economic, political and cultural domains. As a result, it is being used to qualify the state of development. The terms ‘knowledge economy’ and ‘knowledge society’ reflect the growing significance of knowledge as a measure of advancement of the economy and the society, respectively.

    Knowledge presents a promising future because it offers a potential for human and sustainable development and the building of more transparent and democratic societies through the application of new technologies. At the same time, there are some concerns relating to the access to and application of knowledge. For example, within the nations, there is the digital divide. Across the nations, and even within the nation, obstacles appear as intellectual property rights (IPR). These factors could increase the disparities within and across the nations to the disadvantage of the weak.


    Economists, administrators, academicians, entrepreneurs, accountants and managers are used to dealing with physical assets and understand their importance and correlations through quantities, wages, prices, profits, and so on. They understand the importance of education, yet they find it difficult to evaluate knowledge, it being abstract and subjective.

    Knowledge is an ancient concept. It has been engaging the attention of philosophers and thinkers through the ages. As a result, the concept has been evolving. In particular, its growth, processes of generation, dissemination and areas of application have undergone a radical change. Knowledge can no longer be confined to high-value and high-technology areas. It has to be applied to a variety of situations relating to all human activities. Its benefits have to be made available to the rich and the poor, the industrialist and the worker, the urban and the rural, those who govern as also to those who are governed. Its benefits should be made accessible to all irrespective of their capacity to pay. Therein lies an essential difference between other acquisitions of mankind, such as capital, land, labour and technology, on the one hand, and knowledge on the other.

    India was, at some point in the past, at the forefront of knowledge development but centuries of neglect and foreign domination reduced it to a level of relative backwardness. After the country regained freedom in the middle of the last century, it opted for planned socio-economic development to move from an agrarian economy to an industrial economy. While the country was engaged in the process of modernizing its economy and setting up a variety of industries, it witnessed the emergence of information technology (IT). Despite having the disadvantage of being a poor country, India took up the challenge and due to the foresight of its leadership and the talent of its people, it emerged as a global player in IT within a short time. There are now departments of IT in the central government as also in the state governments—India having a federal system with a central government at the federal level and state governments at the state level—for spearheading the IT movement, and evolving policies and strategies for the promotion of IT in the country. The policy framework, infrastructure, educational and research institutions, and industry provided adequate support, and IT professionals rose to the occasion and developed the nation's image as that of a leader moving ahead shoulder to shoulder with the developed nations and competing with them. Information technology is one of the few areas for which the country is known in the outside world.

    India may have achieved a great deal in establishing its supremacy in the field of IT, but it has to be striving all the time to make further advances. The subject of knowledge economy is an emerging one and it holds tremendous potential as well as challenges for India. The country's biggest challenge as well as opportunity lies within itself. It has to meet the requirements of its growing masses. Conscious of this responsibility, the Ministry of Communications and Information Technology (MCIT) has developed a 10-point agenda for the development of communications and IT (Office of the Minister for Communications & Information Technology 2006). Among the initiatives in the area of IT that will directly benefit the masses are as follows:

    • Bringing cyber connectivity to every citizen.
    • Providing broadband connectivity to all schools, public healthcare centres and gram panchayats by 2010.
    • State-wide area e-governance network over all the states of the country and one lakh community service centres spread over 6,000 blocks.
    • Software tools and fonts for 19 Indian languages by 2007.
    • Information technology and information technology-enabled services (ITeS) sector to provide employment to about 2.2 million software professionals by 2008.

    At this juncture, India can see the possibility of widening its horizon to prepare itself for new and emerging challenges of the future. It can foresee that just as IT is the flavour of the present times, biotechnology will emerge as a hot subject over the next couple of decades, and knowledge applications will be the leading thrust area in the remaining part of this century. India is probably among the first few nations in the world which are moving from less-developed status to developing or developed status using knowledge as a differentiator. In addition to IT, some industrial sectors such as pharmaceuticals and biotechnology are already looking at KM as a strategy for dealing with global competition.

    Knowledge management is a recently developed area. It is a contribution of the private sector where knowledge as a competitive advantage of the firm is recognized as knowledge capital. More recently, KM has been adopted by the public sector as well. It is now being extended to the functions of the government under the scheme of e-governance. ‘There is now persuasive evidence that the information and computer technology (ICT) investment boom of the 1990's has led to significant changes in the absolute and relative productivity performance of firms, sectors and countries’ (Hughes and Morton 2005).

    The pervasive use of KM has led to the emergence of knowledge worker and knowledge economy.

    As a new movement, KM is being initiated by large companies. Most people consider it as more or less the same thing as information management. At the company level, the difference between KM and information management gets blurred because of the extensive use of IT platform for the former. Information overload and a virtual absence of formal training and infrastructure for knowledge managers are posing a challenge for companies globally. Companies need qualified knowledge managers but are finding them hard to come by. The educational system in developed countries is seizing the opportunity and launching programmes for training knowledge managers. Not to be left behind, India is joining the movement and its top-level business and technology institutes are planning to train students in all aspects of KM—data mining and data warehousing, natural language processing, project planning, scheduling and management, information management and security.

    Although ‘knowledge’ is an important concept in considering the direction in which the society should move, the related important issues have not yet been investigated in a scientific manner. For example, questions such as the following need to be answered: What is knowledge in the context of society? Of what practical use is knowledge in delivering services to the people? Or, how can knowledge be created, disseminated and applied with the participation of the people? Many other questions will have to be addressed for developing a future with a focus on ‘knowledge’.

    An open platform will be useful as a pool of ideas for all companies, educational institutions, government agencies and people's organizations that wish to promote and share knowledge. It can cooperate with education experts, research institutes, universities, business and industry associations, and government and non-government agencies. The aim of such a platform could be to trigger public impulses by means of imaginative ideas and projects and to enlist further institutions and companies for the network. Building up knowledge as a science would imply educating knowledge scientists, training such knowledge creators as project/team leaders, strategic planners, research and development (R&D) managers and those engaged in the production and distribution of goods and services. An institution that meets the above objectives and, in addition, develops pioneers of the knowledge society could be termed as Knowledge School.

    The impact of the school's research would manifest in its education, service and outreach activities. The faculty could publish regularly and contribute to scientific literature. Their research work could be of various kinds such as exploratory, conceptual, empirical, policy analysis, diagnostic and evaluatory. In addition, the faculty could, besides offering consultancy services, contribute to the deliberations of various commissions and study committees.

    Knowledge schools could soon become preferred destinations for students just as B-schools are at present. There is a growing realization that a country, which aims to become competitive, will need knowledge scientists and managers in large numbers.

    Some companies in developed countries are ascertaining how goods can be produced at a lower cost in the developing countries and exploring how to distribute them, again at a lower cost, across their own country. The emerging ‘model’ has knowledge transfer and KM as a basis for establishing new modes of decentralized and offshore production and distribution. This model has the potential of making drastic changes in the production and consumption patterns in the country. If it can be taken across the world and scaled up, it can make an impact on the global market and significantly alter existing well-set technologies, business models and business paradigms.

    While the companies may look at KM in the limited frame of corporate working, those outside, in the government and academia, have to project it over a wider canvas. Their concerns have to be universal encompassing all sectoral activities on the one hand, and all subsystems, on the other. Public policy has to aim at all levels, large, medium and small industries, small-scale and tiny sectors, informal sector and self-employed, manufacturing as well as agriculture, mining, construction, transport and a host of services. Through the development and implementation of appropriate KM policies and strategies, the economy must become competitive, enhance productivity and quality, increase employment and incomes, and improve the delivery of services.

    A relatively newer trend in KM is to apply it to the social sectors. In this direction, the possibilities of applying KM techniques to such areas as healthcare and education need to be explored. In countries like India, this is a significant need. The economic sectors are making progress and contributing to the increase in gross domestic product (GDP) growth rate, but the social sector needs greater attention of policy planners for building human capital and providing public welfare. As a process, managing knowledge involves a multi-stage decision framework, starting with investments in R&D to diffusion of knowledge to creation of innovations and finally capturing value through application of inventions and innovations. The whole process is ridden with uncertainties and difficulties in managing the complexities, more so in the social sectors where cost–benefit analysis involves non-commercial parameters.

    It is time to rethink the past and focus on policies and programmes for the future suited to the emerging knowledge economy. Various stakeholders may have their concerns. Issues relevant to them should be brought out for conducting an in-depth examination with a view to making recommendations on policies and strategies to be followed for smooth, efficient and fast transformation of the economy.


    The objectives set for preparing this book are as follows:

    • To present a perspective of changes that are taking place in the economy.
    • To identify the directions that the economy should take for transformation to a knowledge economy.
    • To elicit the concerns of stakeholders regarding the process and consequences of change.
    • To bring out issues that need to be looked into through further research.
    • To provide inputs for the identification of education, training and dissemination of activities.
    • To facilitate the development of research programmes that will lead to recommendations on policies and strategies of change.

    The objectives were translated into themes for the purpose of writing the chapters. Accordingly, authors were requested to focus on the following themes:

    • Mapping the directions of transition from industrial economy to knowledge economy.
    • Anticipating trends and identifying issues for formulating policy initiatives and developing strategies of change management for transformation from industrial age to information age.
    • Identifying new knowledge streams/disciplines that are likely to emerge in the evolving knowledge economy and suggesting specialized courses to help meet manpower requirements of the knowledge economy.
    • Generating deeper understanding, among key stakeholders, of the scope and significance of knowledge, technology, R&D and innovation management for the emerging knowledge economy and developing model course-curricula for adoption by other knowledge institutions.
    • Creating a network of knowledge institutions.
    • Promoting the use of KM as a tool for securing larger good for society.

    In all, 27 chapters were prepared. The chapters discuss a variety of issues related to the concerned themes. But the area of each theme is so wide and the amount of work done on KM is so limited that the themes may not be seen to have been covered comprehensively. Besides, it was not the intention to offer solutions through these chapters. The aim was to bring out as many significant issues as possible for deeper study and research.

    Directions of Change towards a Knowledge Economy

    The transition from industrial economy to knowledge economy will manifest itself at the macro level. However, it must be noted that changes will take place in each of the industrial sectors though at differing pace. These changes also need to be mapped for developing future strategies. Operationally, changes emanate at the organization level and get aggregated at the sector and national levels. It is important to study changes taking place in organizations to get a feel of what is happening at the ground level. As such, for mapping the directions of transition, the entire spectrum will need to be looked at. Four chapters are grouped under this theme. They are as follows:

    • ‘Mapping the Directions of Transition from Industrial Economy to Knowledge Economy’ by Vinod Kumar, Harsha Sinvhal and Vinay K. Nangia.
    • ‘Conceptual and Assessment Dimensions of Knowledge Management: An Overview’ by Vidhu Shekhar Jha, Siddharth Mahajan and Himanshu Joshi.
    • ‘Knowledge Management in a Manufacturing Organization’ by Ravi Prakash.
    • ‘Structure and Behaviour of IT Firms in India’ by K. Narayanan and Savita Bhat.

    Kumar, Sinvhal and Nangia report in their chapter ‘Mapping the Directions of Transition from Industrial Economy to Knowledge Economy’ that, according to John Naisbitt, the term ‘megatrend’ describes a fundamental underlying trend that shapes the future. There are numerous trends, including the shifts from an industrial society to an information society, a national economy to a global economy and hierarchies to networking, but three of them are considered especially important. They are as follows:

    • The increasing power of technology and especially the acceptance of the internet as a key tool of business and commerce.
    • Virtualization—the ability to work and trade over large geographic distances.
    • The emergence of knowledge as a key focus of policy and strategy.

    These megatrends can help in visualizing the future, thereby assisting in formulating strategies for taking up the challenges that are likely to emerge in the future. It is, thus, logical to study the megatrends first and then map the transition in a somewhat definitive sense.

    The authors have identified the following 13 areas where action is likely to be of great importance:

    • Demography
    • Socio-economic scenario
    • Technology (IT based and non-IT based)
    • Environment
    • Natural resources (renewable and non-renewable)
    • Energy (renewable and non-renewable)
    • Water management
    • Inequalities
    • Health
    • Military
    • Geo-political realities
    • Agriculture
    • Global systems

    In each of these areas, the following issues have been brought out for further study.

    • National and global demography.
    • India versus China.
    • Comparative demography of various continents, namely, Asia, America and Europe.
    Socio-Economic Scenario
    • Will there be a knowledge divide in times to come?
    • How will knowledge economy change the socio-economic scenario or be governed by it in future? The study may be divided into social, cultural and political scenarios. It may cover regional aspects globally and at the country level. It may also include study of various castes and communities, their role in nation building and Indian diaspora the world over.
    • Will the role of information and IT continue in the knowledge economy, or will IT in future be used merely as a tool while advances in other non-IT fields overtake IT and once again govern the economy? The study is expected to see the status of sunset industries and use of technology in such industries.
    • Which are the sunrise industries today and how long are these going to last?
    • Which are the future technologies and industries? What is the likely direction and future of technologies in areas like nanotechnology, material science, bio-sciences and biotechnology?
    • Which new inter-disciplinary subjects and topics will emerge?
    • In a knowledge economy, will the nations, which are ahead, force nations lagging behind to do the ‘dirty’ work and produce and take over the ‘elite’ businesses themselves? What is likely to be the policy framework globally and at the national level?
    • What kind of interventions will be required and what will be the regulatory framework?
    Natural Resources
    • What is the possibility of finding new reserves?
    • Shall we change the way we live to be able to manage with decreasing availability of natural resources?
    • Can we find altogether new ways of exploring and/or producing new resources economically?
    • What are the future energy scenarios for India?
    • Will India, which has climatic advantages, have an edge in the new world order?
    Water Management
    • Will there be major international disputes, even wars, over water?
    • How will the country meet fresh water requirements for the growing population with increasing pollution? How will the future water needs be met?
    • Will we supply drinking water which has been condensed from the atmosphere? What will be its effect on climate?
    • Will desalination of the sea water be a practical solution to water availability problems?
    • Which factors will contribute to national, regional and global inequalities?
    • How do we evolve strategies to bridge the gaps? Will knowledge economy widen the divide or bridge it?
    • How can knowledge economy help in making the world a better place with more equitable distribution of resources?
    • How will knowledge economy deal with issues related to equal rights and opportunities, irrespective of colour, race and gender?
    • Will the nature's law of ‘survival of the fittest’ be challenged? Will advancement in knowledge lead to a less healthy and aged society in which the majority of the old live on the produce of the few?
    • Where will the major health facilities and services reside in the new order? Will access to healthcare be available to all sections in all areas?
    • What will be the new health systems and practices in the future? What kinds of new diseases and their cures will emerge? Will there be drastic changes in medicinal systems and practices?
    • What challenges will the knowledge economy pose in relation to the national, regional and world power equations and what will be its effect on economy?
    • What kinds of warfare are expected to take place in future?
    • What shall be the type, kind, style and composition of defence forces of the future? What kinds of military institutions and organizations will evolve in future?
    Geo-political Realities
    • What will be the parameter of measuring ‘power’? Will the ‘military power’ or ‘currency’ or ‘monetary’ values be replaced by ‘knowledge’ values?
    • How will the new power equations influence the way people, societies, nations, regions and the world are ruled?
    • Food security.
    • Efficiency and effectiveness of production that covers yield and cropping pattern.
    • Marketing of the agricultural produce at a reasonable price.
    • Storage and distribution.
    • Contribution of agriculture to national economy vis-à-vis the number of persons engaged in or dependent on agriculture.
    • What can be the impact of knowledge economy on the agricultural sector and how will it ensure a better life for a majority of the population?
    Global Systems
    • Financial: Will there be international bodies like Bank of International Settlements, or will new systems for global financial order evolve?
    • Trade: Will new bodies and systems evolve in addition to those that exist today, such as the World Trade Organization (WTO) and International Chamber of Commerce (ICC)?
    • Legal: What is going to be the system for global law making and for dispensing justice; will the new bodies and systems come into existence?
    • Global Systems of Cooperation: Will the agencies such as the International Monetary Fund (IMF), United Nations (UN) and World Bank continue to be relevant, or will they change or disappear and be replaced by new ones?
    Conceptual Issues at Industry Level

    The chapter entitled ‘Conceptual and Assessment Dimensions of Knowledge Management: An Overview’ by Jha, Mahajan and Joshi discusses, at the industry level, various issues related to knowledge-based assets. These include information about the external business environment, internal business processes and customers. The key is to link the decision makers with the knowledge-based assets that will help them to arrive at good decisions.

    In the context of organizations, the authors argue that KM as a business practice is being widely adopted by companies. Knowledge management is the process through which organizations generate value from their knowledge-based assets. Generating value from these assets involves sharing them among employees. Information technology tools enhance the transfer of knowledge-based assets across departmental boundaries within a company. In addition, in order to implement KM, a company needs to consider leadership, culture and measurement issues.

    From a survey of literature, the authors identified the following activities through which KM can be pursued in companies:

    • Identify intangible assets.
    • Prioritize the critical knowledge issues.
    • Accelerate learning patterns within the organization.
    • Identify and diffuse best practices.
    • Increase innovation.
    • Increase collaborative activities and a knowledge-sharing culture as a result of increase in awareness of the benefits of KM.

    For assessing the implementation of KM within the company, certain methods have been designed. In one of them that incorporates a number of metrics and is used widely for strategy implementation, namely, the Skandia Navigator, measures have been organized into five categories. These are as follows:

    • Financial: includes standard financial measures of performance.
    • Customer: looks at measures of customer satisfaction and retention.
    • Process: focuses on the company's processes and how they are organized to deliver value.
    • Renewal and development: how the organization is preparing for the future, considering such areas as customers, markets and products.
    • Employee related: considers such issues as productivity and values.

    In another method, five types of KM metrics, which would help assess the level of KM implementation within a company, have been considered. These are as follows:

    • Technology metrics—number of e-mails, number of online forums, website traffic, number of search queries.
    • Process metrics—response time to queries, meeting international certification Standards.
    • Knowledge metrics—number of employee ideas submitted, best practices created, active CoP.
    • Employee metrics—peer validation, feeling of empowerment.
    • Business metrics—reduced cost, increased market share, improved productivity.

    Two knowledge management assessment tools (KMATs) for assessing the level of KM implementation in a company have been referred to. These are (a) KMAT developed by American Productivity & Quality Center (APQC) and Arthur Anderson and (b) KMAT developed by Maier and Moseley. The tool developed by APQC and Arthur Anderson is divided into five sections: the KM process, leadership, culture, technology and measurement. Within each section four to six questions are used to assess the KM capability within that area. In the KMAT developed by Maier and Moseley, the implementation of KM is assessed in five dimensions: identification and creation, collection and capture, storage and organization, sharing and distribution and application and use. The tool consists of 30 statements on which respondents have to give their response.

    The two KMATs together provide a useful way to assess the level of KM implementation in companies. The first tool assesses KM implementation based on the issues of leadership, culture, technology and measurement. The second tool looks at how knowledge in a company is identified, captured, stored, shared and applied. These tools have already been used in companies abroad to assess KM implementation. They could be used in Indian companies too. A review is necessary to see if they need any modifications for use in the Indian situation.

    Application of KM in a Specific Industry

    Ravi Prakash, in his chapter on ‘Knowledge Management in a Manufacturing Organization’, has put forward certain issues related to the use of KM in industrial organizations. The importance of KM has become more apparent due to the accelerating pace of change of industrial, political and service environments, staff attrition (especially that resulting from years of downsizing and re-engineering), growth in organizational scope, geographic dispersion associated with globalization of markets, global integration, increase in networked organizations, growing knowledge intensity of goods and services, revolution in IT, and so on. On the increase are complexity of products, services and operations, competition and innovation. On the decrease are staff availability and time required for obtaining skills and expertise. Organizations have to develop systems for generating knowledge, storing it, sharing the same with different teams and making it useful for decision making at all levels.

    In the industry, KM draws inputs from a wide range of disciplines and technologies like cognitive science, expert systems, artificial intelligence and knowledge-based management systems, computer-supported collaborative work, library and information science, technical writing, document management, decision support systems, semantic networks, relational and object databases and simulation.

    The growth of KM in the manufacturing industry can be attributed to, amongst others, the following needs:

    • Interaction with suppliers, subcontractors and customers.
    • History of previous product runs/projects.
    • Improvement in productivity to deal with shrinking profit margins, shorter life cycles, outsourcing and cost control.
    • Consistent, complete and timely knowledge/information to every entity involved in manufacturing.
    • Re-organization of professional skills due to ever-changing technology.
    • Migration of experts in search of better job opportunities.
    • New recruits taking long time to acquire the required level of skills.
    • Collective learning/capacity for innovation.

    The author has suggested the following measures for adopting KM in a manufacturing organization:

    • Pooling of all the information, including work-related files and orders dispatched, etc. Availability of best practices centrally.
    • Capturing of data about customers at the point of sales.
    • Use of R&D to leverage application of the concepts of KM.
    • Creation of greater value from existing intellectual assets.
    • Strategies for focusing on individuals' innovation and knowledge creation.
    • Firm commitment at all the levels of management to a knowledge-focused strategy.

    The architecture for KM in a manufacturing industry should be based on integrated system of knowledge manager, enterprise resource planning (ERP) system and process tracker. Enterprise resource planning module consists of production management, production planning, trade promotion, quality control, inventory management, packing and forwarding, purchase, maintenance, personnel and payroll, finance, receipts and payments, and management information system. Process tracker involves capture, transfer and renewal of information as major processes; it is a feedback system in which feedback is sent by the user of process/products to the knowledge manager. Knowledge manager captures this information to modify it and convert it as an input to the knowledge base. Transfer of this knowledge base should be available to user for future reference. Knowledge capturing involves codification, indexing, classification, aggregation and discussion. Transferring is a series of processes by which the organization distributes information and knowledge. By transferring information, the organization permits the user to incorporate, transform and apply the accessible knowledge for turning information into a value-creating process. Renewal of data implies that knowledge has to be adapted, transformed, destroyed and renewed all the time in the process. When all the three entities, namely, ERP system, knowledge manager and process tracker, work in tandem, strategies for KM are accomplished.

    The knowledge manager may use a set of tools that could include configurable interface, data integrator, business intelligence, content and document manager, and knowledge enabler.

    A manufacturing organization can reap the following benefits after achieving successful implementation of KM:

    • Creation a knowledge base of various batch runs (product category-wise), percentage yield achieved, reasons for improved/reduced yield, process parameters/quality control measures affected, and so on.
    • Tracking production personnel efficiencies and their training/skill needs.
    • Downtime analysis, categorization and breakdown forecast, maintenance scheduling and planning.
    • Production process simulation for a new product or product mix.
    • Capturing of information electronically.
    • Reduced load on personnel.
    • Improvement in the workers' skill profile.
    • Capturing of interactions with quality assurance, production and production planning and control departments.
    • Conservation of energy and materials. 10. Improvement in the final yield.
    Emerging Activities

    Knowledge management is being introduced in existing activities and organizations. In addition, new types of activities and organizations are emerging which are essentially knowledge based. A typical example of such activities is the IT sector. Narayanan and Bhat examine the structure and behaviour of IT firms in India in their chapter on ‘Structure and Behavior of IT Firms in India’. The IT sector has the potential to grow, provide employment and internationalize. It is now recognized that information and communication technologies (ICT) can help in promoting social equity and sustainable development. Further, the drive to use ICT to transform India into a knowledge economy has increased the importance of computer hardware, software and services industry.

    The IT industry in India dates back to 1960s. It has many developments as a result of policy changes since then. Major changes could be summarized as follows:

    • Mandatory Indian participation in ownership and control of foreign subsidiaries was introduced in 1970s resulting in the exit of IBM and splitting up of International Computers Limited (ICL).
    • Indian companies such as Tata Consultancy Services (TCS), Electronics Corporation of India Limited (ECIL), Computers Maintenance Corporation (CMC), Hindustan Computers Limited (HCL), DCM Data Products and others came up.
    • During the 1980s, the export of software and computer peripherals was encouraged while permitting import of mainframes and supercomputers.
    • A new computer policy was announced by Department of Electronics (DoE) in 1984 to promote manufacture of latest technology computers at internationally comparable prices. Imports (parts and know-how) were liberalized at low duties to support domestic hardware manufacturers.
    • In 1986, DoE announced a Software Export Development and Training Policy. Duty was cut to 60 per cent, which was subsequently cut to 25 per cent in 1992, and 100 per cent income tax exemption was announced on profits from software export. Most of the regulations were made lenient in this period. The DoE also invested in knowledge-based computer systems (KBCS) programme with five Indian Institutes of Technology (IITs), Indian Institute of Science (IISc) and National Centre for Software Technology (NCST).
    • National Informatics Center set up NICNET, a satellite-based communication network over 439 cities and towns, to computerize government business at all levels.
    • During the 1990s, DoE was reprioritized to promote IT rather than regulate it. Liberalization became more effective.
    • Import duty for software, which was 112 per cent in 1991, fell to 10 per cent by 1995.
    • In 1996, VSNL started internet services. Encouragement in the form of tax incentives, infrastructure, free licensing to Internet Service Providers (ISPs), permission to lay cables or setting up gateways, and so on was given to the industry as value of internet was recognized.
    • Software technology parks were set up in the 1990s to provide duty-free imports of capital goods, high-speed data communication links and tax holidays for 10 years.
    • In the year 2000, the IT Act was enacted. This Act underscores the legal infrastructure for e-commerce and e-governance.

    The IT industry in India can be broadly divided into IT services, software products and IT-enabled services and e-businesses.

    Recent studies conducted on the IT sector have come up with findings, some of which are as follows:

    • Continuous technological upgradation is an important factor for keeping the industry competitive.
    • Role of transnational corporations (TNCs), especially of tacit knowledge transfer, has been important in the competitive evolution of software segment.
    • Foreign equity participation positively determines export competitiveness of firms in the IT industry.
    • Because of the small product life of computer hardware, know-how technology is especially important for export competitiveness of electrical/electronics (software and services excluded) firms.
    • Multi-national Enterprise (MNE) affiliates in this industry are using only one off arms length technology purchases or tacit technological skills from their foreign equity holder firms, to compete in foreign markets.
    • Established Indian companies are now trying to export more sophisticated, higher value-added software and services that would give them higher margins. However, the relative amount of in-house R&D investment in product R&D in Indian IT software firms is much less as compared to similar-sized firms in other nations.
    • India is still having software and services led growth in the IT sector.

    The chapter concludes that the Indian IT sector is enjoying software and service segments led growth. Further, there is a need to encourage the IT industry, especially service firms, to use more sophisticated technologies and to invest in in-house R&D to discover new areas of operation, so that the focus is shifted from low-end routine jobs to high-value-added jobs. Also, around the time when policy makers are trying to reduce concessions offered to the IT industry, there are important policy implications whereby specific concessions like tax holiday could be extended to the new, rather than old firms and the nature of subsidy could shift to promote technological capabilities in general and R&D investments in particular.

    Trends and Issues in Formulating Policy Initiatives and Developing Strategies of Change Management

    The transformation from industrial economy to knowledge economy will be smoother if a congenial policy environment is created. For developing policies and strategies for change management, it is necessary to project trends in the economy and identify issues that need to be dealt with in the policy framework. Research and analysis should provide the necessary inputs to policy makers. All discussions on change management at the macro level should, therefore, lead to recommendations on policies and strategies. Five chapters are discussed under this theme. They are as follows:

    • ‘India's Transition to Knowledge Economy: Variation across States’ by Arindam Banik and Pradip K. Bhaumik.
    • ‘An Approach to Developing Knowledge Economy Indicators for Individual States’ by Siddharth Mahajan, Ashoka Chandra and Mainak Sarkar.
    • ‘Knowledge Management Initiative and Practice for Moving towards Learning Organization and Business Excellence’ by Himanshu Joshi, Vidhu Shekhar Jha and Siddharth Mahajan.
    • ‘New Approaches to Management Research and Knowledge Building: Division, D-Vision and Direct Vision Approaches and Their Convergence’ by Subhash Sharma.
    • ‘A Note on Change Management Processes’ by M.D.G. Koreth.
    Inter-State Variation in Transition to Knowledge Economy

    Banik and Bhaumik, in their chapter on ‘India's Transition to Knowledge Economy: Variation across States’, analyse the performance of the Indian states in terms of their convergence based on select state domestic characteristics. The analysis is carried out within distinctive groups of states to reflect different institutional and economic parameters in the light of the current situation. On the basis of analysis of statistical data, the authors infer as follows:

    • The current structure of the select state economies with the help of broad primary and secondary sectors' contribution to state domestic product (SDP) in 2003–04 indicates that three clear pictures are discernible. One, the contribution of the tertiary sector to the respective SDP appears to be dominating for the southern states. Two, as regards the northern states, the role of the primary sector is distinct. Gujarat, on the other hand, has taken a commanding position with the help of its secondary sector. This postulates the possibility of convergence and divergence across states.
    • Data reveal the beneficial effects of investment in human capital and institutions across states. Quite significantly, the new economy services contributed to net state domestic product (NSDP) in southern states and hence raising their per capita income. West Bengal and Maharashtra have recently encroached in these areas. Basic literacy, on the other hand, has little role to play in raising the per capita income. This implies the need for further investment in human capital. Currently this unskilled population is in the wrong line of work. The cities are now hungrier for skilled populations. The poor in backward states are less likely to be at school despite the government regulation of education till 16 years of age.
    • The rise of ‘knowledge industries’ is a new aspect of India's future development. This is the Indian edition of ‘leapfrog’ where human capital in the high-technology sector has acted as a powerful engine of growth. States (such as Gujarat, Maharashtra) which are relatively well developed due to manufacturing activities have human capital in the low-technology sector, less intervention by the state sector and their geographical closeness to prosperous cities.
    • States which are relatively well developed due to high technology (computers, software) have created human capital from endogenous factors such as proactive policies and other interventions in order to create an appropriate environment.

    The authors conclude that economic factors alone may not be sufficient to explain the development of human capital. Sometimes the issue of culture dominates priorities. These are questions that can be rigorously tested in future research and raise an exciting set of questions.

    Knowledge Economy Indicators at State Level

    Mahajan, Chandra and Sarkar, in their chapter entitled ‘An Approach to Developing Knowledge Economy Indicators for Individual States’, have adapted the World Bank approach for assessing the KM attainment of the states. According to the World Bank Knowledge Assessment Methodology (KAM), the knowledge economy framework consists of four pillars. These are education and training, innovation and technological advancement, information infrastructure and a proper economic and institutional regime. While the authors are still in the process of finalizing the variables to be measured for three of the four pillars, they have computed the normalized score for the information infrastructure pillar for states. Delhi and Punjab are the two highest-ranking states on the information infrastructure pillar while Jharkhand and Chhattisgarh are the bottom two states. A suggestion has been made in the chapter to interpret the state Knowledge Economy Indicator (KEI). The state KEI has been proposed to be calculated by taking the average of the normalized scores on the four pillars of the knowledge economy for each state. The state KEI in any period is a measure of the relative performance of the state compared to other states, in moving towards a knowledge economy. One can compare the state KEI in a reference year (for example, 2000) to the state KEI in the current year. Also cited is a methodology for assessing the effect of knowledge economy indicators on economic growth. This is done by fitting a regression model with the dependent variable being annual economic growth and the independent variables being knowledge economy indicators together with other variables.

    Growth of Learning Organizations

    Companies worldwide have used the concept of KM to harness the potential of individuals and teams, and use it as a strategy for success. The chapter on ‘Knowledge Management Initiative and Practice for Moving towards Learning Organization and Business Excellence’ by Joshi, Jha and Mahajan is an attempt to establish a linkage between KM and learning organization, and how it helps in moving towards business excellence. Business excellence, with respect to improved performance of people and processes, customer satisfaction and creation of a better society, is achieved through appropriate use of knowledge assets of individuals and teams. A learning organization is a group of people continuously enhancing their capacity to create what they want to create.

    There are several themes, which emerge from various perspectives on learning organizations. They are as follows:

    • In order to grow, organizations need to learn continuously.
    • Both individuals and organizations learn, using different methods, producing different outcomes.
    • Information storage, processing and sharing are important.
    • Context (structure and culture) contributes to organizational learning.

    Knowledge management and learning organization should be taken up as an integrated and reinforcing concept. This approach may exploit newly acquired knowledge for continuous learning. As knowledge mandates an adaptive and responsive culture, this integrative approach may facilitate knowledge creation and transfer throughout the organization. This will enable organizations to develop a shared vision among its stakeholders and ability to realize it. The end result is quality improvements across the organization, be it quality of knowledge, quality of relationships, quality of decision making and improved performance.

    Widening the Conceptual Framework of Knowledge

    The meaning of knowledge is understood by all but the concept is defined variously and vaguely.

    It is necessary to distinguish between data, information and knowledge to understand the differences and relationships in this continuum. The terms ‘information’ and ‘data’ are often used interchangeably with the term ‘knowledge’. These terms have different meanings. In general, data are raw facts. For data to be useful for making decisions or interpreting patterns, it has to be processed to obtain information. Knowledge is perceived as meaningful information. While data and information are characterized by their ‘organization’, information and knowledge are differentiated by ‘interpretation’ (Bhatt 2001). Knowledge is an understanding gained through experience, reasoning, intuition and learning. Individuals expand their knowledge when others share their knowledge, and one's knowledge is combined with the knowledge of others to create new knowledge (CIO Council 2001).

    Knowledge is derived from information. It results from making comparisons, identifying consequences and making connections. Sometimes wisdom and insight are also included in the definition of knowledge. Wisdom is the utilization of accumulated knowledge. Knowledge also includes judgement and ‘rules of thumb’ developed over time through trial and error. Davenport and Prusak (1998) defined knowledge as a fluid mix of framed experience, values, contextual information, expert insight and grounded intuition that provides an environment of and framework for evaluating and incorporating new experience and information. Knowledge pyramid, shown in Figure 1 is a way of representing the continuum graphically (Cong and Pandya 2004).

    Figure 1 Continuum from Data to Wisdom

    Knowledge is becoming an important resource and is considered the key source of comparative and competitive advantage (Swan and Newell 2000). For some, knowledge is ‘economic ideas’ (Wigg 1997) or ‘intellectual capital’ (Stewart 1997) and is talked about in terms of ‘stockpiles’, ‘reservoirs’, ‘exchange’, ‘capture’ and ‘utilization’, without understanding its epistemology—knowing it exists and understanding its context, and hence, its importance (Swan and Newell 2000).

    Our understanding of knowledge is evolving. The concept of knowledge may be extended to the ‘conscious’ and the ‘sub-conscious’. Sharma, in his chapter on ‘New Approaches to Management Research and Knowledge Building: Division, D-Vision and Direct Vision Approaches and Their Convergence’, has attempted to elaborate on the concept in the framework of different quantum states of mind. He states that there are mainly three quantum states of mind, namely, Division, D-Vision and Direct Vision. He also identifies a fourth state that represents convergence wherein mind operates at the convergence level as well as at the extended sensory perception level. In Division state, the mind operates at the divided vision level. In this state, a problem is divided into sub-problems and solutions are sought through this process of division. In D-Vision state, the mind looks at all the aspects of the problem simultaneously. In Direct Vision state, the mind operates at the direct-perception level, wherein it is at the intuitive and revelation level leading to tacit knowledge. Division approach is at the core of the ‘Western Enlightenment’, D-Vision at the core of ‘Eastern Awakening’ and Direct Vision approach at the core of ‘Many Routes to Nirvana’ representing three historical processes and three major thought currents that have influenced the world in many ways.

    Management researchers have largely been influenced by the ‘Western Enlightenment’ tradition. There is a need to expand the horizons of management and social science research, and knowledge creation by following other paths, namely, the ‘Eastern Awakening’ and ‘Many Routes to Nirvana’. In addition to the three quantum states of mind, there is also the fourth quantum state that represents the convergence state and could be referred to as the DEAN (Direct Enlightenment Awakening and Nirvana) state of mind. In this state of mind, ‘Western Enlightenment’, ‘Eastern Awakening’ and ‘Many Routes to Nirvana’ find a new convergence.

    A summing up of an informal discussion on these issues, prepared by Divya Kirti Gupta, entitled ‘Towards Knowledge Society—A Discussion’, is presented as Appendix to this book.

    Change Management Processes

    Koreth describes, in his brief chapter ‘A Note on Change Management Processes’, an operational strategy to bring in change. According to him, for a long time, global research in change processes has been focusing on small group dynamics. In recent years, that is, since 1985, attention is being paid to large-group dynamics in order to facilitate multi-stakeholder collaboration and change in:

    • Organizations (of various kinds, both private and public);
    • communities (urban and rural);
    • professional groups; and
    • cities and states.

    Research, experimental work and practice in small-group and large-group dynamics have resulted in the demonstration of two successful change processes, namely,

    • Future Search Process (FSP) and
    • Large-Group Interactive Process (LGIP).

    These two methodologies are based on the following principles:

    • All the multiple stakeholders need to be identified, represented and involved full-time in the process.
    • The process is experiential, combining rational/cognitive and emotive/relationship factors, in tandem. The change process cannot be only rational or informational.
    • The process is participative, consultative and works through small group dynamics (within the large-group dynamics process).
    • Multiple stakeholders will usually have some common interests, some differing interests and some opposing or conflicting interests. These two (FSP and LGIP) processes help the participants to discover common ground, develop common solutions and generate/sustain their own energy to implement change or new projects successfully.
    • The ‘Future Search Process’ (as the term implies) focuses on ‘The Future of X’, in a certain time-span typically of five years although it could range from 3 to 10 years, depending on the nature of the project. The FSP creates and sustains strong ownership in all the participants and they take on personal responsibility and accountability for detailed planning, resource generation and execution. The FSP works typically with 80–100 stakeholders in a large open hall. In FSP everyone is a resource as also a participant in an experiential, action-learning process. If FSP feels it needs more expertise than it possesses, it can find it outside the group.
    • While the FSP focuses on creating a preferred future, the LGIP (250 to 500 stakeholder-participants) focuses on resolving current issues or finding and implementing agreed solutions to current problems. This process also helps distil common ground, common interests, common goals and common solutions, with a strong sense of ownership and commitment to implementation. The combined pool of knowledge, experience and competence is tapped through the processes of large-group dynamics and small-group dynamics.

    These two proven processes are relevant to developing strategies of change management for transformation to the knowledge economy.

    Human Resource Development for the Knowledge Economy

    The emergence of knowledge economy will require a wide variety of expertise. All sectors of the economy and all levels of occupations are affected by the transformation of the economy. Skills need to be relevant not only for the operational needs of economic activities but also for their upgradation and improvement. A host of new activities, processes and technologies are likely to come up throwing up the need for some new occupations. Thus, the occupational profile and the content of occupations will witness large changes. For developing the appropriate occupational profile, education and training systems will have to cater to skill development needs of the emerging economy. Development of human resource will, therefore, be a critical component for the success of the initiative to evolve a knowledge economy.

    One chapter is discussed under this theme: ‘Identifying New Knowledge Streams in the Evolving Knowledge Economy’ by Prema Rajagopalan and M.S. Mathews

    Emerging Knowledge Streams/Disciplines

    The chapter by Rajagopalan and Mathews is based on internal consultations within IIT-Madras and it outlines the teaching and research areas in engineering and technology considered important in the context of a knowledge economy. Their findings are summarized as follows:

    • Power and communications
      • Power quality
      • Industry-oriented communications
    • Computer science
      • Cryptography and Security network
      • Very Large Scale Integrated (VLSI) networks
      • Bio-informatics
      • Data mining
    • Biotechnology
      • Biotechnology applications in industry, agriculture and healthcare
      • Bio-informatics
    • Infrastructure
      • Transport
      • Power
      • Housing
      • Telecommunications
      • Water supply and sanitation
    • Nanotechnology
      • Solar energy
      • Carbon nanotubes
    • Energy
      • Generation, conversion, conservation, storage and distribution
      • Mainstreaming energy from renewable sources
      • Decentralization of power generation from fossil fuels
    • Manufacturing
      • Machine tools engineering
      • Manufacturing processes
    • Mechatronics
      • Automation
      • Robotics

    For making the programmes relevant and useful, various strategies have been suggested in the chapter. They include

    • interaction with industry;
    • sponsorship of students by industry for Master's programmes;
    • reverse engineering for producing innovations;
    • inter-disciplinary cooperation; and
    • networking of institutions.

    Suggestions made in the chapter will undergo further processing through discussions with the industry. Expansion of such efforts has other dimensions as well. Some of them are referred to as follows:

    • Range of disciplines: New disciplines need to be identified in other areas as well, for example, physical sciences, life sciences, social sciences.
    • Levels of education: In addition to degree and postgraduate levels, programmes have to be introduced at diploma (polytechnics) and certificate (ITI) levels.
    • Quality of education: Existing institutions and programmes should be improved. Attention has to be paid to contents and their relevance, pedagogy, evaluation, infrastructure, teachers' quality and training.
    • In-service training: Because of fast changes in technology, and consequently skill requirements, workers of all levels should be provided training interventions periodically. As such, an exhaustive plan of training a variety of occupations at various stages of their career has to be evolved.
    • Informal economy: Training, induction as well as mid-career, has to be imparted to workers in the informal economy. This has been a hitherto neglected area.
    Scope and Significance of Knowledge, Technology, R&D and Innovation Management for the Emerging Knowledge Economy

    The transformation to a knowledge economy will entail changes in the thinking and working of organizations and people who have the potential for contributing to or benefiting from it. Stakeholders will need to develop a deeper understanding of the role of knowledge, technology, R&D, innovation, and so on in the growth of the knowledge economy. Efforts will, therefore, be required for advocacy, sensitization, adoption, education and dissemination of knowledge economy and its imperatives amongst the stakeholders.

    The key stakeholders could be classified broadly as follows:

    • Policy makers and implementers, that is, relevant government departments
    • Academic institutions, for example, educational, training and research institutes
    • Corporate sector, industry associations and small-scale industries
    • Workers organizations
    • Non-governmental organizations (NGOs), especially those engaged in the promotion of and skill development for the informal economy
    • School/college/university students and unemployed persons
    • International agencies

    The following eight chapters are discussed under this topic:

    • ‘Key Stakeholders for the Knowledge Economy’ by Prema Rajagopalan and M.S. Mathews
    • ‘Knowledge, Science and Technology’ by Abid Hussain
    • ‘Innovation in Knowledge Economy’ by Rajeeva Ratna Shah
    • ‘Intellectual Property Rights (IPR) in Knowledge Management(KM)’ by A.K. Sengupta
    • ‘Research Planning and Management in a Knowledge-Intensive R&D Organization: The Case of CSIR-India’ by Naresh Kumar
    • ‘Strategy and Structure in the Knowledge Enterprise’ by Arun P. Sinha
    • ‘Expectations of SME Sector from Knowledge Economy’ by K.K. Sarkar
    • ‘New Public Management in the Emerging Knowledge Economy’ by T.S. Krishna Murthy

    In their chapter on ‘Key Stakeholders for the Knowledge Economy’, Rajagopalan and Mathews report the findings of a survey conducted amongst selected industrial and R&D establishments located in Chennai. They looked at eight organizations engaged in areas critical to the nation's economy. The responses of the organizations define the existing linkages between the academia and industry in the following terms:

    • Visits of the industry team to engineering colleges all over the country, where students are addressed and apprised of opportunities of working with their organization.
    • Faculty of elite institutions taking up collaborative research including funding for such endeavours by the industry.
    • Sponsoring the industry staff for higher degrees in reputed educational institutions with whom Memoranda of Understanding have been signed.
    • Recruitment missions and sporadic contacts with the academia.

    Some initiatives were suggested by the respondents to enlarge the scope of linkages. They include

    • taking part in regular teaching of some units of existing courses in academic institutions;
    • participation in and providing inputs for designing new courses that would be important;
    • offering internships to engineering undergraduates, but laid a minimum period of six months for the programme to be effective;
    • facilitating collaboration with interested faculty so that research can help solve shop-floor problems; and
    • sponsoring their staff for higher education in academic institutions.

    Regarding training fresh graduates, IT industries expect generic skills and they have a regular scheme of providing specific skills to them. Others unanimously felt a large gap between what the students learn and what is actually required. Some industries spend almost a year training their new recruits and consider this time as some kind of a loss. ‘A passing comment on graduates from elite institutions is that they are theoretically good but do not have sufficient knowledge to handle problems’ (see Chapter 11).

    Sunrise industries seem to have a healthy relationship with the government. Their contribution to employment growth as well as economic growth is recognized. At the same time, the government, as a funding agency for R&D, spends a large share of research funds on work of interest to such industries. The legacy industries are not too happy. They feel that their contribution to the country's development should not be under-rated, and the support in terms of policies and programmes is inadequate and non-facilitating. Preferential treatment for small and medium enterprises (SMEs) further weakens support of the government to large industries of the old economy.

    It may be stated here that discussions of linkages between industry and academic institutions have been going on for a long time. The All India Council for Technical Education (AICTE) has a Board for Industry–Institute Interaction. The Council for Scientific and Industrial Research (CSIR) has been aiming to, among others, improve and enlarge the communication channels with customers and stakeholders; involve and associate professionally equipped personnel/group in each laboratory and/or external (foreign/Indian) organizations/consultants in business development and marketing activities; and permit select CSIR laboratories to set up separate companies/legal entities for business development and marketing (see website of CSIR at for more details). There has been some progress by way of campus recruitment, funding of consultancy projects, and so on but the association is limited to top-level institutions and companies. Much more needs to be done by each constituency to take the linkages to visible levels. For instance:

    • Academic institutions should regard industry-related work as a mainstream activity and give due credit to their researchers/faculty for successful assignments. Also, they should develop a professional approach in terms of quality of output, budgets, time schedules, and so on.
    • Industry should consider supporting long-term initiatives such as instituting chairs, funding acquisition of expensive equipment/software, starting specialized programmes, and so on.
    Science and Technology

    Abid Hussain, in his chapter on ‘Knowledge, Science and Technology’, looks at knowledge as an all-pervasive entity which will expand and become our most valuable resource. Science and technology (S&T) helps us to take advantage of old and new knowledge, inventions and discoveries, innovations, R&D, and so on.

    Man has always had an urge to study the nature and its principles. The curiosity led to inventions and discoveries as a conquest of the mind. At the ground level, technology and science or rather knowledge was converted into various products and services. The success of nations today is not due to their having land, labour and capital, but those nations that have access to knowledge have been able to bring about many great changes utilizing the remaining factors of production. Knowledge has broken the barriers which were preventing outside ideas and thoughts from coming into the market. Today, knowledge flows easily and new ideas are accessible to everybody without let or hindrance. We can neither stop competition, nor can we prevent people from coming into our country, making things and selling them. Consumers will decide what they wish to buy and their choice will depend on their getting the best value for money.

    People of India have the talent, drive and enterprise to succeed in a competitive environment, as proved by them in other countries. Their efforts will be fruitful if backed by suitable policy measures. One of the measures required for the purpose is spread of education of all levels. Another measure is to promote a culture of innovation. A connected issue is the regime of patents. We have to train people in the industry and outside in reading and understanding the patents and getting along with the related work. In this context, we should also look at the traditional knowledge available in India.

    Nehru had underscored the need for developing a scientific temper. Knowledge of S&T is extremely important and it has to be intertwined with cultural values. We should be willing to do things that are correct and things that are new and worth doing, and we should be prepared to break the barriers for going ahead.

    Innovation and Knowledge

    A knowledge economy is somewhat different from a conventional market economy, explains Rajeeva Ratna Shah in his chapter on ‘Innovation in Knowledge Economy’. The current market economy is based on capital, and capital shrinks with sharing. Knowledge, on the other hand, increases with sharing. While a market economy functions purely on the basis of competition, in a knowledge economy, competition is going to be there eventually but there is an increasing role of collaboration in innovation activities even amongst competitors. India stands way behind the developed countries and even behind developing countries such as Brazil and China in terms of innovative capacity. This shows that India has a long way to go to overcome competition for superiority, which is intense, to realize its potential as a knowledge power.

    Innovation goes beyond technology innovation. It includes technology information, product information, process information, product innovation, process innovation, market innovation, and so on. Innovation leads to the creation of intellectual property and intellectual property will be, in a knowledge economy, the hallmark of competitiveness. It is the modern technology sector that is contributing mainly to knowledge and innovation. This sector comprises activities such as nanotechnology, computers, networks and biotechnology. It is important to consider the legacy economy also for competitiveness, for in the legacy sector major interventions are required. That is why it would be necessary to identify the building blocks and promote innovations therein for creating India as a new manufacturing power. To this end, we need to take care of innovation, technology, design, micro-cost monitoring, ICT applications to management processes, ICT application to technology processes and global benchmarking of quality.

    Innovation assumes strong individual intellectual power. For developing the human resource with this purpose, creativity should be nurtured. This also implies that bright young persons should be taking up careers in R&D and innovation. This has not been happening in recent years. The government is now considering proposals to attract talented young persons to higher education in science through the award of scholarships and fellowships on a large scale.

    For making investment in R&D efficient in terms of wealth generation, private sector should play a larger role. However, government initiative will be necessary to make it possible for the private sector to create expensive facilities, possibly through incentives and with the involvement of industry associations. As has been noticed in other countries, a great deal of pre-competitive collaborative research may have to be taken up by competitors.

    While dwelling on technology support to design, supply chain management, customer relations management, manufacturing, nano-manufacturing, and so on and technology benchmarking, the chapter also looks at instances of ICT applications in society. In this context, two examples of creation of unique IDs have been described, one for villages and the other for individuals and firms.

    Intellectual Property Rights

    In his chapter on ‘Intellectual Property Rights (IPR) in Knowledge Management (KM)’, Sengupta has discussed some of the pertinent topics related to IPR together with their relevance to KM. The status of the IPR and R&D in India has also been briefly brought up, as well as the state of the knowledge society in this country. For an effective KM system to be in place, the issue of ownership of the intellectual property of knowledge can be of paramount importance. Safeguarding the IPR in a transparent, efficient and effective manner facilitates identification, creation, acquisition and sharing of knowledge. This is particularly relevant for bringing out the tacit knowledge residing with experts and people with experience, grass-root innovators and traditional knowledge holders.

    Intellectual property rights formalize people to own their creativity and innovation in the same way that they can own physical property. The owner of intellectual property (IP) can control and be rewarded for its use, and this encourages further innovation and creativity to the benefit of the society. It will often not be possible to protect IP and gain IPR without their having been applied for and granted. Although there are many types of IP, the chapter is confined mainly to patents. An IPR database becomes a fairly detailed archive of globally accessible knowledge whose exploitation is subject to national IPR laws. A proper use of the IPR databases, therefore, forms an essential part of a global KM process.

    Innovations, almost in all cases, require efforts and resources, sometimes substantial in financial terms. Therefore, protection of IPR for all such innovations needs to be a priority so that eventual commercialization can take place.

    Two of the major issues relating to IPR have been highlighted. They are as follows:

    • Sharing of credit/rewards by the scientist and the employing organization, and
    • Intellectual Property Rights in case of collaborative and sponsored research.

    The first India Patent Act was introduced in 1856. It was modified and amended in 1911. After independence, a more comprehensive bill on patent rights was enacted in 1970. In the Patent Act, 1970, emphasis was on acquisition of technology from the developed world in order to build infrastructure in all sectors of the economy. Provision for registering product patents in the 1970 Act was not included. Instead, process patents were the primary instruments in protecting IP. The awareness about IPR was low among the scientific community in the country and licensing regulations and laws discouraged patent registrations from abroad. Patenting activity increased at a fairly rapid rate since 1950s until 1970, when the new and weak patent law was implemented. There was a significant fall thereafter in patenting, especially in the areas of chemicals, food, rubber and plastic products.

    The level of patenting activity in India remained low until early 1990s, when India became a member of the World Trade Organization (WTO). The agreement on Trade Related Intellectual Property Rights (TRIPS) in the WTO necessitated harmonization of the relevant Indian patent-related laws with the international standards, and accordingly several new legislations and amendments in existing laws were enacted by the Parliament. The number of applications for patenting in India, which was around 3,000 per year until 1994 (compared with the US figure of 300,000), rose to 17,500 in 2004–05. This number is expected to increase further in the future, especially after the 2005 amendment. In the expanding knowledge economy in India, there is a clear demand for accelerating the processes of identification, development, dissemination and uptake of innovations. Besides the modern scientific knowledge, the Indian civilization has traditional knowledge and grass-roots-level innovative practices, largely in the rural and tribal areas. Safeguarding the IPR of these grass-roots innovators and traditional knowledge holders would be a first step in the process of bringing them out into the open. With the new IPR regime in place, an interactive KM system can be envisioned with the involvement of all the stakeholders in the economy.

    Planning and Management of R&D

    Planning and management of research in an organization whose major activity is research is a complex task. Various systems and procedures have to be installed for effective management of resources—material and intellectual. In public-funded research institutions, accountability becomes even greater. Naresh Kumar has presented, in his chapter entitled, ‘Research Planning and Management in a Knowledge-Intensive R&D Organization: The Case of CSIR-India’, a case study of the Council of Scientific and Industrial Research (CSIR) which is a public-funded body having 38 laboratories located all over the country. Tracing the changes that took place over the years in the management systems of research in CSIR, the author shows how CSIR evolved as a knowledge-intensive, multi-location, multi-sectoral industrial R&D organization. Lessons drawn from this transformation are summarized here.

    The organization has to develop a vision for its long-term role. The vision should characterize the organization in terms of areas of work, expertise level and its development, facilities, type of research, funding and revenue model, service to users and society, national and international benchmarking, interface with stakeholders, consultative mechanisms, assessment and evaluation systems, and so on. An important feature of knowledge-intensive institutions is networking.

    This experience of networking presented in the two examples cited in the chapter shows that in R&D/technology management, ultimately it is the network partners' stake which determines the success of networking. Networking has now been made an integral part of R&D and technology management in the whole of CSIR.

    Knowledge Enterprises

    Knowledge enterprises are characterized by a high rate of utilization of knowledge and its rapid obsolescence. In such enterprises, knowledge is a main driver of competitiveness.

    Sinha has described in his chapter on ‘Strategy and Structure in the Knowledge Enterprise’ the features of such organizations and the key features of the strategies that such organizations can employ to ensure success. He has also outlined the salient features of the structures that can aid their achievement of goals.

    Amongst the stakeholders, the buyers and users are two critical and distinct players. In some cases, it is the end-user customer, rather than the buyer, who is more relevant. Knowledge process outsourcing (KPO) companies for instance have assignments from a wide range of consultants. In the investment domain, the end-user may be an individual or a mutual fund that needs the advice of the consultant, which in turn seeks a specific set of data or analytics that the KPO company can provide.

    A key business stakeholder, other than the founders, is a venture capital entity, especially in the early stages of a knowledge enterprise. Search for business stakeholders is an ongoing concern. In many cases, the founders establish and develop the enterprises so as to make them saleable at the right opportunity.

    Knowledge enterprises face unique challenges of (a) risk and uncertainty regarding the potential of market for a technology; (b) proprietary technology especially when the technology may be co-operatively developed by competitors who work on independent parts; (c) low-entry barriers since many of the real challengers to an existing successful enterprise come from the ‘garage’, such as ‘Apple’ and ‘Google’; (d) learning curve effect resulting in a rapid decline in the price of knowledge products and (e) first-time users, as is the case with buyers for many knowledge enterprises, making difficult the marketing task of inducing customers to overcome product concerns and buy. Among the strategic moves the author has highlighted are fast to the market, differentiation on features or technology, consumer trial, upgradation of technology and alliance with key suppliers.

    Typical features of the structure of a knowledge enterprise include (a) less of barriers across the structure; (b) more of collaborations; and (c) higher capacity for change and rapid learning.

    While knowledge enterprises could be spread over a large variety of activities, relatively more knowledge-intensive enterprises could be technology development players, technology acquirers, technology utilizers or vendors and implementers.

    Small and Medium Enterprises

    Sarkar, in his chapter on ‘Expectations of SME Sector from Knowledge Economy’, presents the point of view of SMEs, especially with regard to their sustainability in a knowledge economy. He suggests how SMEs can become more competitive in a knowledge economy.

    Small and Medium Enterprises are important in view of the significant role they can play in promoting inclusive growth through expansion of opportunities of productive, sustainable and widely dispersed employment at competitively lower per capita costs. For SMEs to be effective in this role, they need diffusion of new knowledge for technology upgradation. A vast number of SMEs are ‘unregistered’ and are thus in the unorganized sector. Such units as are in the unorganized sector should also have access to knowledge, invention and innovation, enabling them to update their technology, products and services.

    One of the measures for the benefit of the unorganized sector and for updating the knowledge of its workers could be the expansion and renovation of the Industrial Training Institutes (ITIs) located in various states and improvement of their curriculum to make it more compatible with the products and skill needs of the unorganized sector. The author suggests, for improving the ITIs, the following:

    • Accreditation of ITIs,
    • Re-training and certification of instructors; and
    • Connectivity with R&D organizations.

    While the Government of India has come out with a set of strategies, for example, cluster development for the SME sector, technology upgradation of the small-scale industries under capital-linked subsidy scheme, and many other facilities. Encouraged by such support, SMEs are going in for product innovation in their own way.

    The Small Industries Development Organization, Ministry of Small Scale Industries, Government of India, has a number of field units such as the regional testing centres, field testing stations, production centres, tool room/tool designing institutes, product-cum-process development centres, central footwear training institutes and entrepreneurship development training institutes. Again there are small industries service institutes in all the states. However, regarding the working of such field units and institutes, measures have become necessary for their development and modernization so as to make them more relevant and research oriented to cater to the growing needs of the unorganized sector.

    The author suggests certain measures for facilitating the integration of SME in a knowledge economy. They include the following:

    • The creative element in the output of the SME sector can also be regarded as intellectual property and is, therefore, subject matter of intellectual copyright, as a specific expression of an idea and not the idea itself.
    • Small and medium enterprisess are not aware of the mechanisms and methodology of protecting their rights. Therefore, there is an emergent need to sensitize the SMEs on this issue.
    • Small and medium enterprises are not aware about the new developments in technology, invention, design, and so on. As such, there is a need for the penetration of Internet in the SME sector and introduction of e-business so that the SMEs can get the benefits of the same.
    • When the defence establishments develop indigenous designs to meet the requirements of components as export substitution, it would be befitting if the defence establishments utilize the ingenuity of the small component manufacturing units by giving them support by way of designs with appropriate raw materials. Since SMEs are deficient in resources and outreach, defence establishments need to be relatively more proactive.
    • Small and tiny units cannot by themselves have access to knowledge, innovations and research, so there should be a nodal agency to store information on innovations, design and products for dissemination to interested units.

    As the author concludes, ‘Knowledge should be utilized for creation of new and better products and services and more and more of employment. It should have its application in labour-intensive organizations which are employment-oriented and need to improve productivity and incomes of its workers.’

    Public Management

    A knowledge society would be characterized by the application of knowledge not only in business, industry, education and healthcare but also in governance and public administration. Today, the two important challenges facing many developing countries, including India, are appalling poverty and protection of democracy from terrorism and violence. In emerging democracies such as India, standards of governance are disturbingly low despite economic growth. Further, standards of governance in dealing with these twin challenges are deteriorating because of negligence and indifference of public administration. This daunting challenge can be met successfully through reforms in public administration to improve the quality of governance.

    Krishna Murthy, in his chapter on ‘New Public Management in the Emerging Knowledge Economy’, brings out the existing problems in public administration and the reforms necessary to resolve them in order to suit the needs of a knowledge economy. He supports the argument that the present pressing problems demand a significant change in the style of governance. Public administration should have a human face and efficacy rather than the traditional and historical concepts of the bygone era. Increased emphasis on quality performance, social justice and humane approach would be the important ingredients of the new public management.

    Citizens of today demand accountability in governance putting pressure on public servants, both civil servants and politicians. Right to information has strengthened the momentum towards public control and scrutiny over public administration. Further, such NGOs have come into existence so as to make increasing demands for transparency and accountability in public administration.

    International market forces and free flow of capital between nations warrant a larger regulatory role for the governments, with knowledge and economic growth getting interlinked. It is widely recognized that the knowledge economy is an emerging star in the global political horizon.

    Aspirations of people increase in a knowledge-oriented society resulting in a rising feeling of dissatisfaction especially among the youth. The interacting conflict of changes—both outside the individual and society as well as within the individual and society—are causing frictions that pose challenges to the governments. People are demanding greater liberty, equality and freedom, and their aspirations, in the context of the present knowledge explosion, cannot be ignored by the governments.

    An important concern of the public is corruption in public life. Corruption takes a heavy economic toll, affects the operation of markets, constrains economic development and delivery of services and distorts institutions including bureaucracy. Lack of transparency coupled with secrecy that shrouds government decisions and operations facilitate corruption. Another important feature hurting interests of people is inefficiency and delay in providing public services. For the first time, the entire population is seriously expecting the government to provide better quality of services more efficiently, in the backdrop of human rights awareness and judicial activism. The demands on public administration will increase as knowledge power acquires more importance and fuels increased expectations especially because of the increasing role of media.

    Public administrators have to blend knowledge power with political power in the interest of social peace and progress. In the new order, imperfections and inefficiencies can be neither ignored nor tolerated. Innovations and initiatives for social improvement will have to be given top priority. Indian brains are occupying important positions in the knowledge economies; we are capable of succeeding in meeting the new challenge posed in our own country by the emerging knowledge economy.

    Creating a Network of Knowledge Institutions

    Networks are becoming increasingly important in the modern economy and present a powerful combination for the future of KM. Interdependence between networks and KM leads to the development of framework for knowledge networking.

    Since knowledge demands the processes of generation, preservation and sharing, networks offer a mechanism for undertaking these tasks. Institutions and organizations have different objectives, activities and foci. For them to be networked, there has to be commonality as well as complementarity in their tasks. For different constituencies, there can be different networks just as there can be networks of micro-perspective and macro-perspective. A network of knowledge institutions will, thus, have knowledge as its focus and could comprise sub-networks of constituents, if so desired. Key functionaries in the member institutions should be committed to work for a mutually agreed set of objectives to make the network successful.

    The following four chapters are included for discussion on this topic:

    • ‘Networking of Knowledge Institutions’ by M.S. Mathews and Prema Rajagopalan
    • ‘International Networking for Knowledge Management’ by Arundhati Chattopadhyay, G.S. Krishnan and U.S. Singh
    • ‘International Partnering for Capacity Building in IMTT: An IIFT Initiative’ by Niraj Kumar
    • ‘Sensitivity to Self-Organization and Effectiveness of IT Networks in the Social Sector’ by K. Sankaran
    Perspective of an Educational Institution

    Mathews and Rajagopalan define, in their chapter on ‘Networking of Knowledge Institutions’, the characteristics of knowledge networks. Important functions of such networks include creation and dissemination of new knowledge and increasing the rate of creation of knowledge. Also, networks should provide clear, recognizable benefits to all participants.

    The authors also describe the concept of knowledge groups and communities. Knowledge communities are groups of people who share common challenges, opportunities or a passion for a given topic, and who collaborate to deepen their understanding of that topic through ongoing learning and knowledge sharing. The example of knowledge network of Honeywell is cited. Honeywell is an organization which has an effective KM system in place. Networking has helped the company to perform better with respect to innovation and development of new technologies.

    The authors also present the experience of a networking project in the academia in which IIT-Madras is a partner and is supported by European Union (EU). The chapter concludes by proposing conceptual models for networking of knowledge institutions in India. The following three models have been presented:

    • Earthquake design of a concrete building: A technology model of networking of seven IITs for solving the earthquake engineering problem.
    • Disaster management systems technology model: A technology management model of networking of IITs, IIMs, IMI for disaster management.
    • Sustainable development: A knowledge model of networking IITs, IIMs, national law schools, medical colleges, colleges of arts and sciences, and so on.
    Perspective of a Consultancy Organization

    The chapter by Chattopadhyay, Krishnan and Singh on ‘International Networking for Knowledge Management’ discusses the correlation between knowledge and development and characteristics of knowledge networks. They make the point that ‘Knowledge needs to be a part of a dynamic system where not only those institutions and networks that create scientific, technical, and social knowledge are integrated but also ensures linkage among the people who understand and utilize this knowledge for socio-economic benefits of the nation’.

    Networks can be formal or informal; the latter add members informally and evolve a community of practices. Formal networks, on the other hand, have a formal membership procedure, whether qualification or rule based, with an approval mechanism (which can be automated). Essentially, formal networks will be based on common interests of members and have a specified methodology of interaction. Members could be either individuals or organizations.

    The broader ownership issues of the knowledge networks are also touched upon. In a knowledge network usually all are equal partners sharing the same objectives and values and are open to each other. However, it is critical to understand the ‘ownership’ of knowledge that is created and is passing through the networks, as it may have implications of property rights.

    The chapter subsequently illustrates India's concerns and requirements as to the uses of national and international networks. The factors, methodology and application of knowledge networks are also discussed. Finally, a case example of an international knowledge network in the form of Asian Productivity Organization has been illustrated.

    Networking for a Specific Project

    Kumar has presented, in his chapter on ‘International Partnering for Capacity Building in IMTT: An IIFT Initiative’, a specific case of networking of four institutions in Europe (UK and Poland) and Asia (China and India) for developing a new international Master's programme on innovation management and technology transfer while developing human resources in each partner institution. The proposal is under implementation and, hence, the chapter outlines the features of the proposed collaboration. The project indicates, first, the realization that formal educational programmes in KM (specialization in innovation management and technology transfer, in this case) have become necessary, and, second, that international networking models are being developed in the area of educational planning for KM as well.

    The creation of a knowledge network for India will require the association of a large number of diverse institutions and organizations. It is important to link all the stakeholders, namely, policy makers and implementers, educational institutions, research institutions, industry and industry associations, workers organizations and NGOs. Since a network, for being effective, must have well-defined objectives and significantly serve the interests of its members, the knowledge network may have to comprise a number of networks or sub-networks serving individual constituencies. Thus, the knowledge network could be a network of networks. It should provide an opportunity to individuals to interact, on the one hand, and it may have linkages at the international level, on the other.

    Role of Social Capital

    In his chapter on Sensitivity to Self-Organization and Effectiveness of IT Networks in the Social Sector, Sankaran brings in the concept of self-organization and its role in networks involving the social sector. He finds that there are innumerable examples of successful networking of business organizations, facilitated by advances in IT. However, there is more to these networks than technology alone. There has been a re-definition of what should and should not be shared, what is meant by loyalty, identity of organizations and that of individuals, willingness to trade efficiency for flexibility, greater tolerance for trial and error, and so on. These issues go deeper than mere availability and use of hardware, software and associated technical knowledge. Such factors, which are beyond the technical realm, could be roughly termed as self-organization-promoting factors. Because of such factors, much evolution of networks has not taken place where social infrastructure is involved. Sankaran argues that an understanding and appreciation of cultural and social factors that promote self-organization among those who are trying to bring about effective social IT networks will create more effective networks.

    The objectives of the organizations and the society may be furthered when individuals, as members of their respective organizations, interact in a purposeful and mutually interdependent manner. However, in normal situations, an understanding of the mutuality and cultivation of give-and-take may be missing. Policy makers and the intended beneficiaries require a new mindset that recognizes the value of inter-dependencies, multiple viewpoints, plurality, and so on. In such a situation, the role of the expert will not be to provide knowledge but to gather streaks of wisdom to generate collective good.

    Citing the findings of a survey, the author argues for a more inclusive and open approach to IT network creation that is sensitive not only to the need for technical abilities but also to social, cultural and behavioural factors. Sensitivity to latter factors should be with a view to create more of self-organization. Sensitivity to such factors in network designers and policy makers may bring about significant enhancement in the effectiveness of knowledge networks.

    Application of Knowledge Management for Achieving Societal Objectives

    Knowledge management can benefit society in various ways. Some of the benefits may be indirect, for example, growth of a specific industry whether IT or ITeS, raising the productivity of a production process. Any measure that expands consumers' choices, reduces costs, increases business and production activities, raises employment and income levels, and so on would constitute a benefit to society. Broadly, such issues have been discussed above. Here, interest lies in those initiatives that would benefit society directly. For instance, any improvement in the social sector activities such as governance, education, healthcare or any impact on masses, especially those who are poor, disempowered, disadvantaged or deprived, could be considered as direct benefits to society. Such benefits would largely imply social development. They merit a separate discussion.

    Five chapters are grouped under this topic. They are as follows:

    • ‘Promoting the Use of Knowledge Management as a Tool for Securing Larger Good of the Society’ by Surinder Batra
    • ‘Knowledge Management and Human Development’ by Mainak Sarkar and Siddharth Mahajan
    • ‘Knowledge Management as a Change Driver’ by Sanjay Dhar
    • ‘A Digital Ecosystem Model for Competitive Agriculture in the Knowledge Economy’ by Runa Sarkar and Jayanta Chatterjee
    • ‘Development Leadership in a Knowledge Economy’ by Nagendra P. Singh
    Conceptual Issues

    In his chapter on ‘Promoting the Use of Knowledge Management as a Tool for Securing Larger Good of the Society’, Batra looks at the relationship between KM and larger good of the society. He postulates that development can be taken as a good proxy for the larger good of the society and there can be no development without knowledge. Although KM as a discipline primarily began with the corporate sector, it is increasingly being considered relevant in the development sector and is being used by several international development agencies.

    Stakeholders in the development arena include national governments, local target groups for various thrust areas of development, development agencies, external experts and knowledge workers. Each of these stakeholders has its own formal or informal repositories of explicit knowledge as well as a huge amount of unarticulated tacit knowledge of considerable value. Knowledge in the development sector continually spreads on its own and does not, as a result, remain in private ownership for long. Sooner or later it moves into the public domain. However, just as in the corporate sector, there are barriers and cultural impediments in knowledge sharing in the development sector. Knowledge management, in the development domain, has essentially led to shifting the border between explicit and tacit knowledge of various stakeholders towards more of explicit knowledge and facilitated global knowledge sharing.

    The author then gives examples of KM applications at the World Bank, starting with its vision to be known as the ‘Knowledge Bank’ in the late 1990s. Knowledge management applications at some other development agencies are also discussed, and the lessons drawn through these applications have been highlighted.

    The Indian knowledge society will have three key drivers, namely, (a) societal transformation for a just and equitable society, (b) wealth generation; and (c) protection of the traditional form of knowledge. Core areas that will spearhead India's march towards a knowledge society would be both technology and service driven. The difference between an IT-driven society and a knowledge-driven society lies in the role of multiple technology growth engines. Multiple technologies and management structures will have to be woven together to provide a strong foundation to the Indian knowledge society. With the use of IT, multiple technologies can be combined to realize a knowledge-propelled society. Further, IT can facilitate conversion of even traditional sectors to knowledge-intensive sectors by embedding new knowledge through multiple technologies.

    In a knowledge society, people who are able to convert knowledge into skilled action become its real capital. Therefore, generation of trained and skilled human resources is a key challenge. A knowledge economy requires India to develop workers who are flexible and analytical, and who can be the driving force for innovation and growth. Further, a vibrant and dynamic knowledge society has to benefit every member of the society. As such, all segments of the society should become consumers of knowledge products. Thus, the knowledge society would have knowledge workers who create quality knowledge products and enlightened citizens who consume such products. A knowledge superpower can only be built if the civil society is nearly 100 per cent literate and has a capacity to absorb new and relevant knowledge. Therefore, development of human capital with thrust on skill upgradation, generation, assimilation, dissemination and use of knowledge would be a fundamental feature of a knowledge society. An external view is then provided from the example of Mexico where pursuit of the concept of ‘knowledge cities’, ‘knowledge citizens’ and ‘evolutionary learning communities’ is currently under full swing.

    The chapter concludes that though significant internal efficiency gains through KM have been reported, it has not taken the shape of a concrete tool which can be simply applied to the known and unknown development challenges of any country. The policy makers have re-discovered that knowledge and skill development are crucial for promoting larger good of society. Further, not only do we require knowledge workers, we also require knowledge consumers and knowledge citizens, if we want a sustainable knowledge society. The creation of such a society begins by enabling and empowering individuals in the community so that they may develop the competencies and sensibilities to meet their personal, economic, social and environmental needs.

    Sarkar and Mahajan, in their chapter on ‘Knowledge Management and Human Development’, look at the state as a provider of government services and, in that sense, similar to a large company, though of a not-for-profit or altruistic kind. It is, therefore, fair to ask whether KM practices that have succeeded in companies can be suitably adapted and implemented at the societal level. And what would be the problems in doing so?

    As far as human development is concerned, the authors recognize that there are two types of knowledge: one, that directly affects human development, such as knowledge regarding a new vaccine, public health, and the other, technical knowledge that affects development primarily through enhancing growth in income and employment, or in other words, knowledge that has an indirect impact. They contend that the latter type of knowledge is as important as the former since growth, although not a precondition for human development, definitely helps in a large measure in achieving it.

    It is widely believed that large disparities in the availability of knowledge, known as ‘knowledge gaps’, exist in the world. The role of the government, therefore, is to design and implement a system that helps in closing this knowledge gap. One of the key drivers of growth is technological progress. Therefore, the closing of the knowledge gap between the rich and poor countries can considerably increase their growth rates which in turn can significantly improve their levels of human development. Recent improvements in telecommunications technology and a steep fall in prices of such technologies have also meant that today a villager in a remote part of India can have access to knowledge. This phenomenon was unimaginable as recently as a couple of decades ago. It must also be noted that the gains from globalization will accrue primarily to those countries that are successful in managing knowledge, and the gap between the winners and losers is only likely to widen over time.

    Knowledge in the context of a company is ‘intellectual capital’. In other words, it is what distinguishes itself from its competitors and contributes towards its core competency. Therefore, knowledge in the business context has to be proprietary since it is what adds value to the company. Knowledge in this case is intellectual property and needs to be protected by the company. Now consider knowledge that is relevant to human development such as the availability of a vaccine for a particular disease. Knowledge in this context is called a ‘public good’, which has two characteristics, non-excludability and non-rivalry. The public good nature of knowledge in this context means that private profit motive is unlikely to generate and disseminate this knowledge. Therefore, governments and other non-profit agencies have to take the lead. Whereas standard KM is related to managing knowledge that is either already available or can be created within the company, in the context of human development the approach needs to be modified in particular because of the public good nature of such knowledge.

    Generating knowledge through R&D is an expensive process and, therefore, it is done primarily by developed countries. Also such solutions may not be readily applicable in the context of developing countries such as India. Therefore, the government needs to develop its own approach to this problem. First, to the extent possible, encourage the inflow of new technologies. Second, encourage the creation of indigenous technologies that are more appropriate for India. Third, universities and other educational institutions should be encouraged to contribute to R&D. Last, private sector should be incentivized to participate in R&D. For absorbing knowledge, factors that facilitate the process include education particularly of girls and other disadvantaged groups, technical education and lifelong education, and awareness development. Dissemination can be improved through social networks and means of communication. In this context, while the private sector may be providing communication facilities, government needs to put in place regulations, standards and incentives for the private sector to establish networks in rural low-income areas as well.

    A company needs to consider leadership, culture and measurement issues for implementing KM. Without the active participation of employees, a KM programme would be difficult to initiate and maintain. Therefore, it is important to set up adequate incentives for employees to share knowledge-based assets while implementing KM. Second, technology is an enabler but technology alone is not enough. Ways in which technology can be helpful in implementing KM include knowledge repositories, CoP, expert locator systems, chat forums and bulletin boards. For implementing KM, the company has to isolate knowledge-based assets from the enormous amount of data available with them. Knowledge-based assets take many forms. These include information about the external business environment, internal business processes and customers. Information about internal business processes includes their standard operating procedures (SOPs), that is, the set of actions necessary to maintain processes at the current desired quality level. Knowledge about customers is a key input for maintaining profitability of companies. Customer preferences and buying patterns need to be monitored. Analysing customer data and acting upon it will help in creating customer loyalty and generating repeat purchases from customers. Customer relationship management (CRM) initiatives in companies are already doing this, but there could be a need to have tighter integration between CRM initiatives and KM.

    Knowledge management may be implemented in phases. A typical schedule would comprise infrastructure evaluation, KM system analysis, design and development, deployment and metrics for evaluation.

    Knowledge management implementation may face a number of problems. Based on case studies, the following problems have been pointed out in the chapter:

    • There is lack of ICT infrastructure including low penetration levels of computers and internet.
    • In the face of the existence of the large digital divide, in the short run a more feasible option would be to use a more direct approach, whereby villagers are approached directly at village fairs. Such an approach, being labour intensive, can only be undertaken with the help and cooperation of other stakeholders such as local government bodies and NGOs operating in the area.
    • Conflicting goals, interests and biases among the stakeholders: In a country as large and diverse as India there cannot be a single solution; one has to look at a multitude of solutions. A useful approach is to demonstrate effectiveness very clearly and also not offend local conventions.
    • Although the content may be developed in English, it needs to be translated into local languages and be easily comprehensible to people with fairly low levels of education, and preferably use of audio–video should be made to illustrate the point. Local content, that is, information on local events, and so on, can make such a system popular and easily accessible to the users.
    • Another problem faced by companies is the need to set up an incentive system that adequately rewards contributors who share their knowledge.
    • The impact of KM is difficult to measure in companies; it is likely to be even more difficult at the societal level.
    • A problem that is likely to become larger and increasingly complex in the coming years is the issue of intellectual property.

    Finally, the chapter gives concrete examples of KM for human development and also highlights some of the issues raised earlier. In the light of their analysis, the authors suggest that an incremental approach should be adopted coupled with a steady monitoring of progress so that changes are made in the approach accordingly.

    Knowledge Management as a Change Driver

    Sanjay Dhar's chapter on ‘Knowledge Management as a Change Driver’ focuses on the processes of application of KM. While knowledge can be used to effect the re-alignment of social forces in a manner as to make the world a more just and humane place, and ensuring that effective sharing and use of knowledge can be used as a means of approaching the ideal of a society of equal opportunities, the goal of equal opportunities and sharing of resources is not achieved, for knowledge gaps become the foundations of developmental gaps by inhibiting developmental processes. Some of the knowledge asymmetries that exist in society are pointed out here.

    The potential beneficiaries of developmental support are unable to access, and are even unaware of, their rights and processes to get support that would enable them to come out of inequitable commercial relationships and transactions. The problem is compounded by corruption. The producers of economic goods, especially in agriculture and cottage industries, are unable to receive due share of the price at which the goods are sold to the ultimate consumers. The target groups of development initiatives do not get the intended benefits for a number of reasons that include inability of the developmental agencies to understand the specific support that would help their targets to achieve a better quality of life and the most effective process to provide that support, lack of awareness of targets of the development programmes as to how successful change management occurs in their own context, inability of the agencies to identify specific practices that will make their projects successful and the lack of consonance between the efforts of the agencies and those of beneficiaries. There is also the inability of the underclass to get the rightful returns on their knowledge, since they are not familiar with their IPR.

    Knowledge management can be used as a means of reducing knowledge asymmetry by ensuring effective flow of relevant knowledge in support of the change processes for social development. Some of the objectives that KM can support include greater transparency in the working of institutions, providing market information and opportunities to the underclass, effective change management by ensuring effective knowledge transfers between developmental agencies, using knowledge creation processes to transform local knowledge from tacit knowledge held within a few successful people to explicit knowledge shared within the target community and using KM processes to enable the underclass to benefit from its own collective knowledge through better documentation and management of intellectual property.

    The five elements of a knowledge-based strategy of development are described as follows:

    • Developmental portal: a gateway to all the development practitioners for accessing and sharing knowledge about work being done for social development.
    • Institutional forum: to facilitate sharing of knowledge about the success and failures of different social developmental initiatives.
    • Social infrastructure: to be facilitated by grassroots knowledge brokers who would provide facilitation for KM processes within the communities who are the intended beneficiaries of the developmental processes.
    • Technological infrastructure: to enable village-level access to the knowledge portal and means of benefiting from knowledge about markets for their products.
    • Institutional mechanism: for the protection of intellectual property of local innovators.

    Managing social development is essentially a process of managing change. One way of managing change is to shift the momentum in favour of the desired change. Knowledge management practices and processes being used extensively in the industry can be utilized to bring in the desired change in developmental activities.

    Agriculture and Knowledge Economy

    Sarkar and Chatterjee discuss the application of KM in agriculture in their chapter on ‘A Digital Ecosystem Model for Competitive Agriculture in the Knowledge Economy’. They underscore the importance of agriculture by stating that agriculture continues to be the occupation and way of life for more than half of India's population and, therefore, ensuring a thriving agricultural economy is critical for India's global competitiveness to be inclusive. A globally competitive Indian economy must have knowledge-driven agriculture, for agriculture has already reached the limits of land and water. Also, cropping patterns in hinterlands of India should respond to global commodity markets in real time. For this purpose, farmers will need sophisticated decision support inputs to anticipate future market scenarios. This would involve quick dissemination of information from the research system to the farmers. Indian agriculture would need to establish a real-time and adaptive knowledge-exchange network. The network would need to build real time feedback routes from the fields to the laboratory and derive necessary traction from other industrial and business KM technologies and processes, for example, user-to-user exchange, expert-to-expert exchange and KM-oriented standards for information storage, retrieval and aggregation with analytics. The chapter reports initial empirical findings from one such collaborative project.

    The digital ecosystem entails a series of interconnected and intra-dependent digital platforms, created at key institutional levels (international, national and local/community) augmented by technical (ICT) and social networking processes that facilitate horizontal and vertical knowledge sharing. The empirical findings show that the ‘ecosystem’ approach speeds up the process of identification, development and uptake of innovation.

    Once the model is validated, it can lead to the development of a digital business ecosystem that can be effective for large multi-plant enterprises or SME clusters facing similar challenges of competitiveness in a rapidly globalizing knowledge-driven economy.

    Development Leadership

    In his chapter on ‘Development Leadership in a Knowledge Economy’, Nagendra Singh points out that knowledge is a critical resource for the growth of a knowledge economy. As a result, knowledge workers, who constitute an emerging category of human resource, require attention. Their characteristics add to the complexities of managing the process wherever they are in key positions. In any setting where the degree of technology-centric process and predominance of knowledge workers are high, the degree of management complexities will also be high. Innovation and competition are important pillars of a knowledge economy. This being so, education has to be paid due attention so that the economy can remain at the cutting edge. In this context, the author brings to the fore the issues of leadership's policies and approach. The thrust of his presentation is on education policy and the development of values among the youth, appropriate for a knowledge economy. In support of his argument, the author has selected the example of BPO (business process outsourcing) industry.

    Two points have been made relating to the BPO industry. First, despite the large demand for workers in the BPO sector, which will continue to grow for some time, the education system has not come up with programmes to prepare students for this activity. A major requirement for working in the BPO sector is command over English language and proper accent—normally American. A large number of teaching shops have come up to provide such training. Such establishments are out to make a quick buck with little concern for quality. Second, employment in the BPO sector is promoting consumerism. Young people are living their dreams like never before. They are soaring higher and far away from anything that is run-of-the-mill. Life is no longer about high education, status, career growth and job security. For them, it is about excitement, adventure, passion, money and a lot of fun. The youth now want to grab jobs at an early age, get large incomes and become consumers of the market economy. There is little aspiration or motivation to pursue higher education and to learn job-related skills. The kind of workplace environment and lifestyle they are chasing are creating socio-psychological problems. Quoting a study, the author contends that 40 per cent employees of 10 BPO organizations had got into serious health problems, and 21 per cent had got into illicit relationships. Thus, serious questions arise with regard to the education policy as also to the preparation of the nation's next generation. The chapter concludes by emphasizing that it is time the leadership aimed at integrated development rather than showing fast economic growth without social development.

    Bhatt, G.D.2001. ‘KM in Organisations: Examining the Interaction between Technologies, Techniques, and People’, Journal of Knowledge Management, 5 (1): 68–75.
    CIO Council.2001. Managing Knowledge @ Work, An Overview of Knowledge Management. Knowledge Management Working Group of the Federal Chief Information Officers Council, August.
    Cong, Xiaoming and V.Pandya Kaushik. 2004. ‘Issues of Knowledge Management in the Public Sector’, Electronic Journal of Knowledge Management, 1 (2): 25–33.
    Davenport, T.H. and L.Prusak. 1998. Working Knowledge: How Organisations Manage What They Know. Boston, MA: Harvard Business School Press.
    Hughes, Alan, S.Michael and ScottMorton. 2005. ‘ICT and Productivity Growth—The Paradox Resolved?’, MIT Sloan School of Management, Working Paper 4579–05, Cambridge, MA, November 2005.
    Nonaka, I. and H.Takeuchi. 1995. The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation. Oxford University Press.
    Office of the Minister for Communications & Information Technology.2006. ‘Ten Point Agenda: Declared by Hon'ble Minister of Communications & Information Technology, Thiru. Dayanidhi Maran on 24.05.2006’. Available at, accessed on 11 April 2007.
    Polanyi, Michael. 1958/1998. Personal Knowledge. Towards a Post Critical Philosophy. London: Routledge.
    Polanyi, Michael. 1966. The Tacit Dimension. New York: Doubleday.
    Stewart, T.A.1997. Intellectual Capital: The New Wealth of Nations. New York: Doubleday.
    Swan, J. and S.Newell. 2000. ‘Linking Knowledge Management and Innovation’, in H.R.Hansen, M.Bichler and H.Mahrer (eds), Proceedings of the 8th European Conference on Information Systems, pp. 591–98. Vienna University of Economics and Business Administration.
    Wigg, K.M.1997. ‘Knowledge Management: An Introduction and Perspective’, Journal of Knowledge Management, 1 (1): 6–14.
  • Appendix: Towards Knowledge Society—A Discussion


    For countries in the vanguard of the world economy, the balance between knowledge and resources has shifted so far towards the former that knowledge has become perhaps the most important factor determining the standard of living—more than land, than tools, than labour. Today's most technologically advanced economies are truly knowledge based.… The need for developing countries to increase their capacity to use knowledge cannot be overstated (World Bank 1998: 16).

    This appendix sums up the discussion that took place at the International Management Institute (IMI), New Delhi on 11 October 2006 among Professor Ashoka Chandra, Principal Advisor and Professor, IMI; Professor Subhash Sharma, Dean, Indian Business Academy (IBA), Bangalore and Greater Noida; Professor Vidhu Shekhar Jha, Professor, Corporate Strategy & Operations Management, IMI and Ms. Divya Kirti Gupta, Assistant Professor, Indian Business Academy (IBA), Greater Noida, on the emergence of knowledge economy and knowledge society, and its implications for society, individuals and organizations.

    Professor Ashoka Chandra initiated the discussion with the definition of knowledge economy and knowledge society, its possible shape and configuration and the issue of ‘values’ that shall emerge in due course of time, and the expectations that individuals and society as a whole shall have in such an economy.

    Professor Subhash Sharma enunciated a new vision of society in knowledge economy that he earlier suggested in his book, Western Windows Eastern Doors (2006). He indicated that the ‘view of life’ in a knowledge society would be ‘eco-sattvik’, that is, a state in which ‘sattvik guna’ gets coupled with the ‘ecological world view’ thereby representing the transcendental approach. Derived from the word ‘sattava’ (essence), sattvik means pure/spiritual and guna means ‘substance-attitudes’ (Sharma 2006). The nature of knowledge society would be ‘harmonic’ and leadership would be ‘divine-democratic’ type representing enlightened dimension of leadership. He further suggested the idea of ‘sacro-scientific’ approach to the development of ‘sacro-civic’ society. In a knowledge society there would be a need to develop sacro-scientific temper in order to address the question of values that scientific temper tends to ignore.

    Professor Subhash Sharma was of the view that creating a new society with these characteristics is possible in a knowledge economy because a knowledge economy, by virtue of its nature and in comparison to the industrial economy, shall have high non-polluting elements in it. Moreover, creating such a society shall be ‘development’ in true sense of the term leading to ‘holistic development’ and ‘all inclusive growth’ as well as development of ‘sacro-scientific’ temper on the part of the citizens.

    It is worth mentioning here what Sood (2002) has said about the preliminary experience of rural connectivity projects in different parts of rural India. He concludes that non-elite, rural, artisan and Adivasi communities of South Asia do not, and will not, use information and communication in the same way as industrialized nations do elsewhere in the world. Therefore, Sood emphasizes that far from replicating the online behaviour of highly connected and cosmopolitan societies in North America, Europe or SouthEast Asia, digital development in India warrants the design of products, services, and technologies that solve local problems and ameliorate local socio-economic conditions.

    According to Professor Subhash Sharma, one element that shall play a crucial role in developing the ‘sacro-civic’ and ‘sacro-scientific’ society shall be good governance. Professor Sharma opined that organizations, in order to have good governance, would try to balance competition, conscience and consciousness. He suggested the need to balance market values, social values and spiritual values to develop a sacro-civic society and to create new types of corporates wherein there is a balance between profit, social responsibility and good governance. His model of the balance between market, society and self is presented in Figure A1.1.

    Figure A1.1 Harmony Circle for Balancing Market Values, Social values and Spiritual Values

    Professor Sharma suggested that in a knowledge economy a new balance would be needed between market potentiality of knowledge, social development dimension of knowledge and its spiritual development potentiality. Hence, the knowledge economy should be evaluated not only from the perspective of its contribution to wealth generation but also from social and spiritual development angles. Hence in the knowledge society, knowledge would be respected not only for its commercial value or wealth generation capacity but also for its potentiality for social and spiritual advancement taking us in the direction of sacro-civic and sacro-scientific society.

    Professor Ashoka Chandra looked at the concepts of knowledge economy and knowledge society from a different perspective. Instead of looking at it in terms of arriving at an ideal state of social existence, he focused on the attributes/characteristics/behaviours/things that shall be valued in a knowledge society. He tried to explore as to what shall be held as ‘values’ and ‘disvalues’ in a knowledge economy.

    Professor Ashoka Chandra proposed that the first thing of great importance in a knowledge economy is ‘knowledge’ itself. He was of the view that knowledge, by virtue of its own merits, shall be preferred and valued, and shall have an edge over other things. The importance of knowledge has been re-iterated by many experts and authors in recent times. But Professor Chandra emphasized that knowledge shall be valued in a knowledge society beyond its immediate usage. It shall have importance due to the new vistas that it shall open for the mankind and may lead to holistic development.

    Professor Chandra and Professor Sharma agreed that if knowledge defines the course of society in the future, ‘creativity’ shall be valued since creation of new knowledge shall be important in an economy based on knowledge. Creative people shall be in high demand and organizations and society shall invest in training people to be creative. In this scenario, the education system may undergo changes in the future for promoting creativity. In this context, the work of Perkinson (2003) may be referred, who has mentioned about the four pillars of knowledge society—economic and institutional regime, educated and skilled population, information infrastructure and innovation system of firms. Here, it is worth noting that all the four pillars shall be directly affected by not just the type of education system but also the level of education of the masses. Further, it was felt that knowledge creation takes place on the existing base of knowledge. The sharing of knowledge shall also be valued and shall take place not only for democratic reasons alone but also for building up of further knowledge.

    The discussion also dwelt on the behaviour of people in respect of the need to disseminate information or knowledge. It was broadly agreed that it is certainly not for creating impact alone or benefiting people, it is also for enlightenment of masses that we need to share knowledge. Knowledge sharing has liberation potentiality. Ya vidya sa vimuktaye— it is knowledge that liberates. In a knowledge economy, the liberation potentiality of knowledge shall be an important value as knowledge would be widely available. Cyber revolution has already facilitated this process as it makes information and knowledge widely available to every section of society. Hence, it helps in liberation from domination.

    Ms Divya Kirti Gupta stated that often it becomes almost impossible for an individual to hold back a newly created idea or knowledge. A probable reason for this is that creation of new knowledge brings with it a sense of accomplishment leading to a feeling of completeness, fullness and happiness, and the person looks forward to sharing his/her joy with other people. It was also the opinion of Professor Chandra, Professor Sharma and Professor Jha that the joy of novel creation makes sharing of knowledge possible.

    Professor Chandra also raised the issue of ‘hierarchy’ in a knowledge society. It was deliberated that presently hierarchy is in terms of money, power, and so on, but in a knowledge society hierarchy shall get shaped by ideas. It was felt that in a knowledge society, those ideas that help in enlarging people's understanding of self and universe would be valued.

    It was also felt that ‘democratic set-up’ shall be valued in a knowledge economy, which would include transparency, openness and fairness. The issue of ‘fairness’ was also discussed.

    It was suggested by Professor Jha that fairness may be looked at from the perspective of ‘justice and accessibility to knowledge’, which may lead to a new definition of citizenship. In a knowledge economy accessibility to knowledge shall be taken and accepted as a fundamental right in the same manner as right to speech. It was also indicated that in a knowledge economy, the right to knowledge shall have to be considered equal to the right to salvation, and to have a share in the benefits accruing from knowledge shall also be considered important.

    Further, it was suggested by Professor Chandra that the knowledge economy may also create a need to re-define property rights because knowledge cannot be appropriated. So, the need to transcend intellectual property rights (IPR) may also arise in the knowledge society. There was a consensus that property appropriation shall be disvalued in the knowledge economy.

    Discussions as mentioned earlier also indicated that ‘education of the masses’ shall become a value in a knowledge economy and ‘sacredness of knowledge’ shall also be highly valued.

    It was felt that as society is making a shift towards knowledge economy, some ‘new collective values’ would emerge; they shall be different from the values of economy based on agriculture or industries.

    The discussion also dwelt on the ‘leadership’ that should emerge in the process. Leaders having ‘enlightened collective interest’ in mind shall be crucial for the growth and sustenance of the knowledge society. A new power framework, based on the importance of knowledge, would also emerge in the knowledge economy.

    Perkinson, R.2003. ‘Planning Ahead for Knowledge Societies: “A Perfect Storm” for Global Higher Education’. Available online at (downloaded on 09.12.2006).
    Sood, A.D.2002. ‘Towards a Knowledge Society’. Available online at (downloaded on 05.01.2007).
    Sharma, Subhash. 2006. Management in New Age: Western Windows Eastern Doors,
    2nd edn.
    New Delhi: New Age International Publishers.
    World Bank.1998. World Development Report. Washington D.C.: World Bank.

    About the Editors and Contributors

    The Editors

    Ashoka Chandra, Scientist, Technologist, Educationist, Human Resource Planner and Administrator

    Ashoka Chandra is the Chair Professor, Ministry of IT Chair in Knowledge Economy; Chairman, Government of India Initiative on ‘Competitiveness in Knowledge Economy’; and Chairman, National Institute of Technology, Patna. He was also the Special Secretary, Government of India, Ministry of Human Resource Development between June 1999 and June 2002.

    Professor Ashoka Chandra headed the entire tecnical education system in the country, including IITs, IIMs, technological universities, all engineering colleges and polytechnics, institutions of management education, pharmacy, planning and architecture and applied arts for over a decade. He was also responsible for setting up the statutory All India Council for Technical Education.

    M.K. Khanijo, Senior Advisor and Research Consultant

    With about 50 years experience of teaching, research, consultancy, training, seminars, etc., in industry, educational institutions and research organizations, M.K. Khanijo developed, organized and taught in numerous training programmes, including international programmes and PG Diploma/Master's Degree Programmes on Human Resource Planning and Development for international participants. The Master's Programme was run with the affiliation of GGSIP University. He also has experience in developing and supervising research/consultancy/training activities, institutional networking and institutional development.

    He is also in the process of setting up a Centre for Social Sector Governance for developing research and training programmes on issues relating to education, health, training and employment and participation in governance; and a A Centre for Management of Innovation and Technology for developing research and training on issues relating to development, application and assimilation of technology, working of R&D institutions, and analysis of science and technology policies.

    The Contributors

    Arindam Banik, Professor, International Management Institute, New Delhi

    Surinder Batra, Professor, Institute of Management Technology, Ghaziabad

    Savita Bhat, Ph.D. Scholar, IIT-Bombay, Mumbai

    Pradip K. Bhaumik, Professor, International Management Institute, New Delhi

    Ashoka Chandra, Principal Advisor and Professor, International Management Institute, New Delhi

    Jayanta Chatterjee, Professor, IIT, Kanpur

    Arundhati Chattopadhyay, Deputy Director, National Productivity Council, New Delhi

    Sanjay Dhar, Faculty Member, Management Training Institute, Steel Authority of India Ltd, Ranchi

    Divya Kirti Gupta, Assistant Professor, Indian Business Academy, Noida

    Abid Hussain, Former Member, Planning Commission, Government of India

    Vidhu Shekhar Jha, Professor, International Management Institute, New Delhi

    Himanshu Joshi, Lecturer, International Management Institute, New Delhi

    M.D.G. Koreth, Chairman, ACORD, New Delhi

    T.S. Krishna Murthy, Former Chief Election Commissioner of India

    G.S. Krishnan, Director, National Productivity Council, New Delhi

    Naresh Kumar, Head, R&D Planning, Council of Scientific & Industrial Research, New Delhi

    Niraj Kumar, Professor and Project Director, IMTT, Indian Institute of Foreign Trade, New Delhi

    Vinod Kumar, Professor, IIT-Roorkee

    Siddharth Mahajan, Associate Professor, International Management Institute, New Delhi

    M.S. Mathews, Chairman, Board of Governance; Professor, IIT-Madras, Chennai

    Vinay K. Nangia, Professor, IIT-Roorkee

    K. Narayanan, Professor, IIT-Bombay, Mumbai

    Ravi Prakash, Dean, Research & Consultancy Division, Birla Institute of Technology and Science, Pilani, Rajasthan

    Prema Rajagopalan, Associate Professor, IIT-Madras, Chennai

    K. Sankaran, Professor, International Management Institute, New Delhi

    K.K. Sarkar, Secretary General, Indian Council of Small Industries, Kolkata

    Mainak Sarkar, Assistant Professor, International Management Institute, New Delhi

    Runa Sarkar, Assistant Professor, IIT-Kanpur

    A.K. Sengupta, Professor, International Management Institute, New Delhi

    Rajeeva Ratna Shah, Member Secretary, Planning Commission, Government of India

    Subhash Sharma, Dean, Indian Business Academy (IBA), Bangalore

    Nagendra P. Singh, Chairman, Asian Society of Entrepreneurship Education and Development (ASEED) and Director General, International Institute of Development Management Technology (IDMAT), New Delhi

    U.S. Singh, Deputy Director General, National Productivity Council, New Delhi

    Arun P. Sinha, Professor of Management, IME Department, IIT-Kanpur

    Harsha Sinvhal, Professor, IIT-Roorkee

    • Loading...
Back to Top

Copy and paste the following HTML into your website