Nonaka Revisited: Can Japanese Companies Sustain Their Knowledge Management Processes in the 21st Century?

TLDR: The concept of knowledge economy can be traced back to an influential essay written by Fritz Machlup in 1962, and it has only received extensive attention in recent decades (Godin, 2008, p. 4) as discussed by the authors.

Abstract: Even if the complex concept of the knowledge economy can be traced back to an influential essay written by Fritz Machlup in 1962, the term has only received extensive attention in recent decades (Godin, 2008, p. 4). Nowadays, most scholars agree that intangible assets are far more important for a firm’s success than their tangible counterparts. Aside from the traditional production factors crucial for a firm’s success (land, labor and capital), knowledge is nowadays considered as equally important (Wickramasinghe and Von Lubitz, 2007, pp. 2–3). Peter Drucker, a much-cited leading thinker in the field of management practices, emphasized the need for knowledge workers inside a company already in the 1960s and stressed their critical role for a firm’s sustainable success (Nonaka and Takeuchi, 1995, p. 43; Empson, 1999, p. 67). Being most valuable as an intangible good, knowledge is very hard to manage in the classical way. An individual who possesses expertise in a certain field might take his knowledge with him by leaving the company. Likewise, an organization can acquire new knowledge and therefore increase the organization’s potential by employing new workers or engaging in projects jointly with non-organizational parties.