Turning information into knowledge

The age of knowledge

Knowledge, or the patterns hidden in information, is recognised today as the foundation of a true information-based or new "weightless" economy.

Knowledge consists of practical and innovative ideas for creating appropriate and balanced actions in people.

Are there professionals managing knowledge?

Yes. People are springing up everywhere capable of creating, extracting, storing and presenting (or managing) knowledge from information in an efficient and effective way. Knowledge managers and workers, as they are now called, are becoming as important professionals in their own right as inventors, computer programmers and teachers.

Why do we need knowledge?

For most people, the existence of knowledge means making better decisions for the benefit of a large number of people.

For the business professional, it means increasing the economic and social value of the information sold in the marketplace in the form of books, software and CDs etc; ensuring the quality control issues of any product or service are properly addressed; understanding the difference between needs and wants for customers; and reducing the cost of educating employees and consumers.

Knowledge is a kind of record of what we did in the past and what we can do better in the future presented in a here-and-now approach. It also consists of information about how to do things in a way that supports past knowledge and leads us to a better future.

Does knowledge affect us?

Yes it will. Knowledge affects us as soon as we recognise it is knowledge. Other people may say there is knowledge in a book or a web site. But it is not knowledge until we recognise it as such (i.e. see the patterns in our minds) and therefore has an immediate affect on us (e.g. perform some kind of action).

The way knowledge can affect us can be seen in our children as they watch and listen to visual and auditory information from television and computers. Children recognise the knowledge side of the information when we see them suddenly imitating the things they see and hear into the real world.

In the adult world, things are not much different. Perhaps we may be a little wiser with our extra knowledge and control our desire to show how much effect it can have on us. But people's behaviours can change. We are all somewhat influenced by simple things like advertising on television.

As a consequence of recognising the power of knowledge on human behaviour, we now live in the intangible "knowledge-based" (or ideas mixed with rational) economy where information can be created, changed, highlighted and distributed with extraordinary speed and ease. And we use it to sell everything from food to new cars.

Even the covers of magazines can tell us a lot about how much knowledge is recognised by a publisher in selling information effectively and efficiently.

Remember, knowledge affects how we think, feel and act once we recognise the pattern in the knowledge and see its value to our survival. This is what's making human knowledge a valuable product in the 21st century.

Is knowledge the only thing that is important?

No. Knowledge on its own is not enough. We have to implement it in the here-and-now moment of our lives. We need action just as much as knowledge.

Does it really make a difference to improve our knowledge?

Apparently it does. At least for companies like Coke, they understand that every tiny ounce of improvement made to the quality of human knowledge and the more the knowledge is associated with our raw emotions (e.g. sex, food etc), the more it will entice consumers to do things.

Quality knowledge that is easily recognised by the masses and is seen as valuable or interesting will dramatically increase its benefit to business professionals (whose job it is to see clearly the problems people have and how to solve them properly); to employees (whose job it is to understand and sell the solutions to customers); and to customers (the people who will learn about the solutions, who will buy the solutions from business professionals, and who will implement the solutions in their lives).

Every bit of improvement, no matter how small or seemingly insignificant it may seem, will make an enormous difference in the knowledge-based economy!

How radical is the change to the new "knowledge" economy?

The arrival of the new "knowledge" economy is said to be as important and radical as the invention of steam-powered machines that began the industrial revolution nearly 200 years ago. This is due partly to the fact that knowledge has been given unprecedented importance in human life in the 21st century. It is also because knowledge itself is a "weightless" product.

In other words, knowledge can be created out of nothingness as it would appear with the help of our brains and we don't have to worry about how much it weighs to distribute it like real solid products.

Many of the great industrial icons of the past have at one time learned how products must be solid in-the-hand items capable of affecting people's lives and their environments. But now that view is being supplemented with the realisation that knowledge can also achieve the same thing in a more indirect and subtle way.

Because of this potential impact on people's lives and their environment, businesses involved in the selling of information are now giving knowledge a monetary value depending on how valuable and useful it is to society.

To appreciate the difference in the old and new economies, Alan Greenspan, the Chairman of the US Federal Reserve, described the new economy as a change from large steel mills, petrochemical plants, car assembly plants and skyscraper office blocks of economic value in the 1960s to one where,

"...economic value [is] best symbolised by exceedingly complex, miniaturised, integrated circuits and the ideas - the software - that utilise them. Most of what we currently perceive as value and wealth is intellectual and impalpable." (1)

The shift from physical assets to the more intangible assets of skills, knowledge and experience is also evident in the following quote from a Chartered Institute of Management Accountants' brochure:

"To will need a much broader education....You must learn how to manage the assets that matter most to the twenty-first century organisation: not money, buildings, equipment or materials but the collective skill, talent, experience and commitment of the workforce." (2)

And in the same brochure, the following quote also appears:

"Welcome to the business world of the twenty-first century. A world where everything is connected and nothing is predictable. Where knowledge and imagination are more valuable than physical assets. Where there are no geographical boundaries." (3)

Such a radical change is often described as the knowledge revolution as opposed to the industrial revolution.

And with the revolution comes shorter product life-cycles, mass customisation and accelerated technological change. This is especially true if the products are intangible and are not based on fundamentally reduced or to the core (i.e. "essential") knowledge needed for true stability and long life.

What are businesses doing to get into the knowledge industry?

Not a great deal if we are to accept the view of Professor Thomas Clarke, Head of the School of Management in the Faculty of Business at the University of Technology in Sydney. Clarke is an expert in knowledge management. He co-authored with Christine Rollo (University of Technology) to produce, in association with Standards Australia, the Knowledge Management (KM) handbook entitled, International Best Practice - Case Studies in Knowledge Management (HB 263-2001). Based on his experience and knowledge, Clarke said:

"Companies tend to invest in technology rather than attempting the organisational and cultural change needed to promote knowledge transmission and circulation. Information technology may be a necessary foundation for knowledge management but it is not sufficient on its own." (4)

Fortunately there are companies gearing up for the new "knowledge" economy. For example, various chemical and pharmaceutical companies are speeding up the process of patent application and utilising existing patents in a better way to help maximise the power of their intellectual capital and so improve their performance in the marketplace. In other companies, knowledge sharing on networks is becoming standard KM practice as this ensures quality control and minimal cost and time to modify existing "complex" solutions to meet the needs of clients.

It's all about focussing on the processes of knowledge sharing, knowledge acquisition and knowledge creation as well as the technological and social foundations needed to support these processes.

A company that fails to understand the importance of knowledge in its information-based products will often produce items that are either unnecessarily complicated and/or has an overwhelming amount of irrelevant information, or the items are extremely compact and easy to understand but tend to be too simplistic in its coverage.

A good emphasis on knowledge will often produce high quality, comprehensive and relevant knowledge-based products that are simple to read, concise, easily understood by the masses, and helps people to solve problems.

So what's important - technology or knowledge?

If creating a fast and high quality solution (or knowledge) is required from the mountain of information we now have, then the answer is both, not to mention the people who must use the technology and create the knowledge for the benefit of society. As Tim Kannegieter, a KM specialist working in the Professional Services Division of Standards Australia, confirmed:

"Experience has shown that cultural and technical issues need to be given equal importance in ensuring that any knowledge management initiative is successful." (5)

Think of technology as the tools for helping people sort out, organise and sell all their information quickly and effectively. But it takes the power of people to make the final leap from information to knowledge and to eventually put it all into action if the new economy is to work properly. (6)

In essence, for there to be a quality solution (or knowledge) to all our problems, there has to be a holistic approach to knowledge management. It must involve developing strategies that focuses on people, knowledge and technology. And, if making money is also important, the strategies must also marry knowledge management with the fundamental business processes of companies whose job it is to sell "solutions" to other people.

For example, knowledge managers are now working with the technology makers and business managers to create a new secure online payment service called PAYbySNAP. This system enables any business to make and accept payments over the Internet for as little as A$0.02 to any larger amount without using a credit card.

And best of all, there are no setup or account management fees. A fee is only charged when a bill is paid. You also get email invoices, pay payroll, and transfer money between bank accounts using the PAYbySNAP system.

Whatever systems and ideas we employ to make the knowledge economy work, it will ultimately require a change in the way people view and manage information and not just in the tools made available for people to do the job properly.