Globalization and knowledge-based economy: An economic perspective for approaching and implementing knowledge anagement (KM) practices

There are plenty of economic motivations and arguments for private companies to design, implement and develop Knowledge Management (KM) practices. The economic literature dealing with the main features of the economics of production and transmission of knowledge builds clearly an economic case for KM. KM is probably not just a fashionable managerial discourse but, above all, a social technology that is likely to have a positive impact on innovation and productivity. This paper examines the economic aspects of KM applications placing the main emphasis on KM influence on innovativeness and aims to clear the confusion proposing a specific approach to it. It proposes that the innovative capacity of a firm is dependent on the knowledge creation capacity that is influenced by intellectual capital. Here it is supposed that the capacity to adopt innovations implies a lighter process of knowledge creation, so needs a reinforcement of the prevailing old, existing knowledge and the generation of innovation needs a knowledge transformation of the prevailing old, existing knowledge. On the other hand, the intellectual capital - intellectual assets, by the triad: Human, Organizational and Relational capital, independently, or through interrelations, are determinant for the knowledge creation process reinforcing or transforming knowledge, so influence the organizational capacity to adopt or generate innovations. These innovations add to economic profit and competitive image of the firm. This paper is a literature review paper presenting a theoretical approach to the issues examined.