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I3 UPDATE / ENTOVATION International News
No. 29: May 1999

Contents

Global Knowledge Incubators - David J. Skyrme
Spain: Getting up to Knowledge Speed - Debra M. Amidon
Brazil: Creating New Knowledge Businesses - David J. Skyrme
New Map for a New Economy - An ETD Analysis
Snippets
   KM and Turnover Survey - Nick Bontis
   Global Knowledge in Latest Journal Issue
    New Yearbook on Knowledge Management
   Tour de Knowledge Monde' heard round the globe - Debra M. Amidon
Knowledge Management Events

Editorial

Welcome to this edition of I3 UPDATE / ENTOVATION International News, a free briefing analyzing developments and key issues in the networked knowledge economy. An international flavour to this issue due to Debra's and my recent travels. If you have an international perspective let us know about it!

I3 UPDATE is also available by email. See the administrative information page.

David J. Skyrme
Managing Editor


Global Knowledge Incubators

David J. Skyrme

As the knowledge economy unfolds there are a growing number of opportunities to create world-class knowledge businesses. Already we have seen this happening in Internet related businesses. Stock prices of companies like Amazon.com have risen to stratospheric levels on the US stock market. Some analysts say that they are far too overpriced, while others say that the potential of the Internet has hardly yet been scratched. This phenomenon looks about to be repeated in the Far East, with Business Week (17th May) reporting big surges since January in stocks such as CCT Hong Kong (182 per cent rise), Yahoo Japan (875 per cent) and Daou Technology Korea (260 per cent). But in this globally connected world does location still matter? The staff at IC2 (the Institute of Innovation, Creativity and Capital) at the University of Austin certainly think so.

A Silicon Valley in Much Less Time

It took Silicon Valley some 40 years to reach the state of prominence it now enjoys in the high technology field. In contrast, Austin Texas which was a depressed area with high unemployment in 1980 has achieved similar status in just over 15 years. It has created thousands of new high technology jobs and hundreds of new companies. It is the home of Dell Computer, as well as the location of advanced research and manufacturing facilities for IBM and Motorola. There are over 300 software companies, many started locally, in the area.

Much of this success is due to the vision and drive of George Kozmetsky, the founder of IC2. In the 'Austin model' developed by himself and colleagues, the infrastructure in which new high technology businesses can get started and thrive depends on several interrelated strands:

  • Talent - of enterprising individuals, backed up by good educational and research facilities
  • Know-how - both technical and business
  • Technology - innovation in both the lab and the marketplace
  • Capital - from both venture capitalists and private individuals.

The Austin Technology Incubator (ATI), started in 1989, is one facility in which these strands are brought together. It links together academia, business and government. Start-up companies are given space and access to expertise and capital networks. Since its founding ATI has 'graduated' over 50 companies that have generated over $700 million in revenues and created over 1,800 new jobs. It is a microcosm of what is happening in the wider Austin area, which can rightfully be called a technopolis, a location with a concentration of high technology businesses, the type of business that has grown faster than the average and has generated high levels of wealth (the city is reputed to have several hundred home grown millionaires!).

As IC2 looks forward to the next millennium, it sees itself as increasingly creating knowledge partnerships globally. It recently announced plans for a $25 million Global Knowledge Community centre to be built by 2003, to house the faculty, the business development 'think tank' (or 'do tank' as some staff prefer to call it), and an expanded incubator. It brings together entrepreneurs, business leaders, venture capitalists, lawyers, bankers, educators and many other stakeholders in new business development. Using its expertise on developing technopoli, IC2 already has partnerships with several other institutions around the world, such as Science Park Izmaylovo (outside Moscow) and the Beijing Institute of Technology.

What Do Knowledge Businesses Need?

The Austin model, and other technopoli like Silicon Valley and Route 128 have served their local communities well in the last few decades in developing new businesses based on science and technology. But will the same ingredients work as successfully where knowledge businesses are concerned? At one level, the experience to date suggest so. There are definite geographic clusters, such as the multimedia music industry around Manchester in England or specialized financial services in London. At these locations appropriate infrastructures (of suppliers, services and facilities) develop and are shared, while proximity helps tacit knowledge sharing as people interact with their peers and move between jobs. Another factor appears to be common - the need to bring together in networks the knowledge creators (researchers, inventors, people with ideas), business know-how and access to capital.

However, you can create a knowledge business from your home, anywhere in the world, and carry out many of these functions and interactions online. You can recruit remotely based staff and work in virtual corporations. But is it the same as having an infrastructure of knowledge resources locally and being able to pop round for a meeting at short notice? Only time will tell. There is no doubt that many of the activities and infrastructure needed are becoming available and acceptable on the Internet. A knowledge incubator could just as easily be a network of different communities in cyberspace, but with a specific configuration and focus. Or perhaps there really is no substitute for creating knowledge business clusters in a given locality. In any event, just as the technopolis has served certain communities well for technology based business, we do need to develop the equivalent for knowledge-based businesses - a 'kenoplis'? - whether in cyberspace or in a place near to you!


Spain: How Quickly Can A Nation Come Up To Knowledge Speed

Debra M. Amidon

Don't think that because there is not too much visibility on the knowledge management scene by a country is not bursting with insight and direction with the new agenda.

It is certainly not that Spain is without its documented intellectuals, nor its widely acclaimed explorers and adventurers - Don Quixote being just one example, but in the world presence of knowledge strategy, Spain has been quiet about its accomplishments and aspirations, until now.

In only 9 short months, a focus called Club Intelect - led by Mr. Eduardo Bueno Campos, President, Euroforum - http://www.euroforum.es - has been able to provide an intellectual and social nexus for dialogue on the topic. Already, the consortium boasts over 34 members, including notable leaders such as IBM, KPMG, Siemens, Microsoft, Ericsson, Coca-Cola, Hay Group, HP, Indra Systems, Telefonica and more.

Upon invitation from Dr. Jose Gasalla, located on the Global Knowledge Leadership Map http://www.entovation.com/kleadmap/index.htm, I provided three presentations for the membership: "La Economade Valor Inyangible," "Creanao una Estrategia de Innovacion de Conocimientos," and "Visualizanaos las Oportunidades en la Econimia del Conocimiento." Now, it is interesting that there would be such an interest in the first place; and that the depth of their interest in the topic was significant. But in addition, the hundreds of slides that were used in the presentation were translated into Spanish within a week to optimize receptivity of the audience an optimize dialogue. This was impressive and rather unusual!

The conference also had local representation providing updates on the activity of Spain with the OECD. Dr. Paloma Sanchez, Professor of Applied Economics, Autonomous University of Madrid, discussed the efficiency of capital markets. She described the activities of the advisory committee and their search for the proper methodology for their research. She and her peers understand fundamentally the need to integrate what have previously been SEPARATE indicators for innovation and knowledge/learning. She outlined the plans to rise these opportunities at the upcoming meeting scheduled in Amsterdam. She is realistic in the need to be realistic in what they can measure; but passionate about the need to be measuring the right things!

Eduardo Bruno outlined the plans for research which include:

  1. Analyze what the member companies are doing in terms of Intellectual Capital and Knowledge Management.
  2. Provide case analysis - examples of how knowledge management strategies can be implemented with empirical data.
  3. Comparative studies where new indicators of performance are being used.

More important, he sketched the strategy for Club Intelect to be visible in a number of local, national and global forums: 9th Annual Conference of the Scientific Board of Economics; the 19th Annual Meeting of the Strategic Management Society in Berlin; the Latin American Congress in Madrid, etc. These locations provide opportunities to share their progress and learn simultaneously from other nation efforts. And then there will be the summer course at EuroForum itself at El Escorial, Spain - the residential executive development facility.

In another presentation, the local leadership of BankInter provided a case study example. Maria Calvo, Directora Equipo Gestion del Conocimiento, described their journey - a successful one, I might add - with a focus on knowledge and innovation. By integrating the foci on people and technology, the company has successfully evolve the culture. With participation rates of 76%, they appear to be tapping into the imagination of their employees. Everyone is learning with - what they call - the 'Olympiad of Ideas.'

Club Intelect has also produced an impressive series of publications, which provide a detailed survey of the literature, and models with which companies are experimenting. In fact, in the December 1998 'Boletin de Informacion,' there is an outline of the model that is evolving form the research itself which can provide guidance for companies instituting such programs. The 'Medicion del Capital Intellectual - Mode Intelect' provides even more detail and includes a detailed bibliography. A third compilation is entitled 'Direction Estrategica por Competencias Basicas Distintivas: Propuesta de un Modelo.' Our recommendation is that these publications would be of value to any countries with Spanish-speaking heritage. Contact Pilar Rodriguez Jerico clubintelect@euroforum.es for further details.

The awakening for me came near the end of the day with a question from the audience: "Please explain the difference between Intellectual Capital, Learning Organization and Knowledge Management!" Now, I know this is very confusing for many that only have access to the material within their particular function, company, industry or region of the world. However, the question for me crystallized my own understanding of the three sub-streams of the knowledge movement - the focus on financial capital, social capital and technological capital. Now, we have a Ph.D. thesis on the topic and soon we will release the results of theorists and practitioners in each of the three domains. Stay tuned!

In short, Spain may be a bit late to the national visibility scene; but they more than make up for it in terms of the quality produced in a short period of time. Their worldwide leadership is immanent. They provide an excellent example of how a nation CAN harness the intellectual resources and drive a vision swiftly to take advantage of the opportunities the knowledge economy affords. Then lesson, however, is that it should not be left to serendipity.

Copyright 1999 ENTOVATION International. All rights reserved.


Brazil: Developing T-Shaped Professionals To Build Knowledge Business Clusters

David J. Skyrme

As indicated by other articles in this I3 UDPATE, many regions and countries are now recognizing the implications of the knowledge economy and are developing policies and initiatives so that their citizens can participate fully in these new emerging global markets. I recently felt privileged to get an invitation - out of the blue via the Internet! - to run a two day workshop on knowledge management in Curitiba, the capital city of the state of Parana.

Prior to going I was fortunate enough to be able to attend a one day workshop on Latin America at IC2 (see earlier article). This seminar highlighted the number of collaborative development initiatives in countries from Guatemala to Cuba, and Mexico to Brazil. One speaker at this seminar was Ramiro Wahrhaftig, Secretary of Science and Technology for Parana. He outlined the characteristics of the state (in the south of the country) - 9 million inhabitants in a territory with a size larger than France and Germany combined. Called the 'land of all peoples' its inhabitants are descendants of Italian, Germna, Polish, Ukranian and Japanese immigrants as well as people from other parts of Brazil. For the last few years Parana has been diversifying away from its agricultural base and now boasts many electronic companies and car assembly plants. There are several threads to its industrial diversification:

  • The Teacher's University - great emphasis is placed on education, at all levels. At the heart is good teaching and so this university provides a continuing education network. As well as attending one week update courses, teachers have the opportunity to do 'knowledge enriching' projects in their school.

  • The ZERI network (Zero Emission Research Initiative) - Applying science and technology to use the waste of some industrial processes as inputs to others. This initiative involves researchers, government agencies and businesses of all types.

  • Tecpar Technology Network - integration of several networks to connect universities to businesses to help the processes of technology transfer and continuing education in business.

  • Software Corridors - recognizing the growing contribution of software companies in several parts of the state and helping them become world-class exporters. The agency SOFTEX (Software Exports) promotes Brazilian software capabilities (in fields such as document management, global positioning systems, electronic commerce and factory automation) helps development of external partnerships with investors and exporters. It has branches in Silicon Valley, Austin and Bonn.

  • Nuovos Talentos (New Talents) Programme - This supports six priority action areas in which to build world-class knowledge businesses: agro-industrial technology and biotechnology, environmental technology, information technology, knowledge management, urban management and materials technology.

It was this final programme that took me to Curitiba - to ISAD (the Graduate Institute of Business Adminsitration - http://www.isad.br) at the Pontifical Catholic University of Parana (PUC-PR), by the invitation of Dr Alvaro Cyrino. To spearhead the programme 30 talented PhD scientists from all over Brazil, and who are specialists in these disciplines are going through eight weeks of development in the management strategies and approaches needed to develop these knowledge industry clusters. The course runs from Friday morning to Sunday lunchtime on eight consecutive week-ends (a tough challenge after doing your normal job from Monday to Thursday!) and as well as knowledge management covers other topics including technology commercialization, national and state scientific and technological development systems, negotiation techniques and project management. There are also technical visits and individual projects.

T-Shaped Professionals

One of the aims of the programme is to create 'T-shaped' professionals - individuals who are very knowledgeable and expert in their speciality, but who also have a broader management education and awareness of the wider business and political context. This is akin to the IT hybrid manager - specialists in IT who are also knowledgable about business (see http://www.skyrme.com/insights/6hybrid.htm). In our research then (1990) and in more recent research into the characteristics of successful CKOs, an important factor is a person's ability to network and communicate. These professionals have to bring together people from research establishments, business and governments into to develop a cohesive local strategy for building knowledge businesses that have global presence and relevance.

What was very clear from my two day involvement is that with the talent available, an injection of knowledge about the characteristics of the knowledge economy, managing and exploiting knowledge, a vision and a challenge (from their state Secretary of Science and Technology), that the basic ingredients are quickly coming together. During one of the group work sessions (on developing knowledge industries for their locality, in which five different regions of Brazil were represented), I have never seen such animated discussions in a workshop. I rarely make predictions (preferring alternative scenarios), but I feel confident in making two now:

  1. That the world will hear a lot more in future about the new knowledge industries of the state of Parana.

  2. That there will be a distinctive style of knowledge management (Latin American style - including 'carnival knowledge') that will provide a viable contrast to the current Anglo-American/European domination in the management literature.

New Map For A New Economy:
Holland Is Nearer to Canada than it is to Belgium

Adapted from an ETD announcement (See http://www.eto.org.uk)

The geography of the networked knowledge economy places Germany closer to USA than to France, UK closer to Australia and Hong Kong than Spain. In a new 'map' created by European Telework Development (ETD) the Netherlands has Canada and the Virgin Islands as near neighbours, nearer than its neighbours of Germany and Belgium as shown on the 'old' maps. In these new maps, distance is measured in terms of relative cost of a telephone call.

According to this assessment, UK and Sweden have placed themselves next to the USA and Canada at the centre of the networked world. They have achieved this through early and progressive liberalization of telecommunications, resulting in hot competition for customers' business and subsequent decline in the cost of International calls. In fact, it is now cheaper to phone the USA from the UK than it is France.

Other interesting facets of the new geography:

  • Some countries of central and eastern Europe are on a fast track to the centre. Slovenia, the Czech Republic and Poland are already closer than either Portugal or Greece, with Estonia and Slovakia right alongside.

  • Among Asian and Pacific economies, China at 8.1 "new miles" (where 1 new mile is the UK-USA cost of a phone call) appears much closer than India (12.4), while the main "hi tech" economies such as Japan, South Korea, Taiwan. Singapore are as close as some European countries, with Australia and New Zealand both very close to the centre.

Telephone calling costs are just one measure of the new geography, but an important one. Cheaper lines for consumers means cheaper bandwidth for industry and - with other factors - faster Internet performance for e-business sellers and buyers. ETD suggests that every national and regional government should be aware of its current "distance from the centre" and have a clear strategy to get closer. Proximity to the centre of the networked economy will increasingly determine economic growth.

The full world table of networked economy distances is online at:

http://www.eto.org.uk/eustats/


Snippets

KM and Turnover Survey
Institute for Intellectual Capital Research

We are looking for key respondents in organizations (with a minimum 10 employees) that are willing to participate in an important research study.

The purpose of this survey is to research the relationship between employee turnover, knowledge management and business performance. All responses will be kept strictly confidential. There are a total of 55 items in the survey. It should take only 15 minutes to complete every item in the survey. Each respondent will receive a copy of the results of the research project when complete.

Go to the following URL to complete the survey:

http://libra.mcmaster.ca/turnover

Thank you for your support.

Dr Nick Bontis, Director
Catherine Connelly, Research Assistant


Global Knowledge

The current issue of the Journal of Knowledge Management (Volume 3, Number 1 1999) includes a variety of articles which focus on various aspects of the process of innovation and from all corners of the globe. The Editor, Rory L. Chase, is to be commended for the scope and focus he has provided in this particular compilation of articles.

For those interested in an international perspective on the knowledge movement, we encourage you to secure a copy (http://www.mcb.co.uk) and visit the Global Knowledge Leadership Map (http://www.entovation.com/kleadmap/index.htm) which now features 70 people from 40 countries.

Articles included in this issue:

"Knowledge management in agile innovative organizations"
Guillermo Perez-Bustamante (Spain)

"Modeling of knowledge flows and their impact"
Kenneth Preiss (Israel)

"If only HP knew what HP knows: roots of knowledge management at Hewlett-Packard"
Charles G. Sieloff (USA)

"University-enterprise interaction in biotechnology in the south of Brazil"
Neila C. Viana da Cunha and Edi Madalena Fracasso (Brazil)

"Organizational innovation and virtual institutes"
Zhouying Jin (China)

Countries represented to-date on the Map include:

Argentina, Australia, Austria, Bahamas, Barbados, Belgium, Bermuda, Bosnia, Brazil, Canada, Chile, China, Columbia, Croatia, Costa Rica, Cuba, Denmark, England, Egypt, Finland, France, Germany, Greece, Hungary, India, Indonesia, Ireland, Italy, Israel, Kenya, Korea, Japan, Malaysia, Mexico, Nepal, New Zealand, Norway, Pakistan, Paraguay, Peru, Poland, Portugal, Puerto Rico, Russia, Saudi Arabia, Scotland, Singapore, Slovenia, Spain, South Africa, Sweden, Switzerland, The Netherlands, Thailand, Turkey, Ukraine, United States, Venezuela, Vietnam, Wales, West Indies.

If you do not see your country represented, let us know. If the names have not yet appeared on the Map, let us know who you are. Those interested form those countries already represented are ALWAYS welcome!


Knowledge Management Yearbook

Just published (by Butterworth Heinemann) is the first Knowledge Management Yearbook, edited by James W. Cortada and John A. Woods. It's an excellent compilation of some of the best articles that have appeared in quality publications over the last 18 months. There are five sections:

  • The Nature of Knowledge Management - includes contributions from Karl Erik Sveiby, Laurence Prusak and Ikujiro Nonaka

  • Knowledge-based Strategies - contributors include Tom Davenport, David Skyrme and Debra Amidon (though we actually got a copy of the book before realizing we were in it!!)

  • Knowledge Management and Organizational Learning - over 30 different contributors

  • Knowledge Tools, Techniques and Processes - a fifth of the size of the last section (does this tell us something?)

  • Knowledge Management references - comprehensive bibliography, directory of periodicals, online links, glossary.

It may sound a bit expensive at $65 (we think), but if you were to buy only a couple of knowledge management books this year, this should be one of them (we'll tell you about the other one, when it is published later in the year!). A reference book for your shelf.


'Tour de Knowledge Monde' heard round the globe - Debra M. Amidon

What began in January, 1999, as an opportunity to feature insights from a diagonal slice of experts in the ENTOVATION Network in the Global Knowledge Leadership Map (http://www.entovation.com/kleadmap/) has become a unique medium to deliver the scope and potential momentum of the knowledge movement. In fact, the Map has been updated to now include about 70 people from about 40 countries with new ones being added quarterly.

The first global knowledge concert has begun to travel the world. Accompanied live with the international concert pianist - Silvard Kool (http://www.silvard.com), we have provided musical knowledge messages in presentations for the Annual Meeting of the IC2 Institute Fellows, Lyndon B. Johnson Library, in Austin, Texas - USA, the Annual Awards Night for the Manitoba Quality Council in Winnipeg - Canada and next week will travel to the Skandia Futures Center, Vaxholm - Sweden, where the performance will be videotaped and made available worldwide through a guild (http://www.icuniverse.com) in a new knowledge trading system.

The music of Silvard has already been featured in other Amido in France, USA, Canada, the Netherlands, Spain and Germany. The analysis of the ENTOVATION 100 survey results will soon be reported in an upcoming issue of I3 UPDATE/ENTOVATION News. This represents a cross-section of people who are already in the knowledge field. Thanks to a grant from Siemens Corporation (Munich, GERMANY), the same classification schema will be used on the 1111 student papers from the Cologne Kongress representing 85 countries This analysis being compiled by Trend Monitor International as a major research project of ENTOVATION and will provide a foundation for the Banff Global Knowledge Innovation Project (http://www.gkii.org). Stay tuned for insights into the 'Millennium Knowledge Generation'...

(Editor's Note: I recommend Silvard's CD 'Picture of Time' - very relaxing music to play on your PC when writing newsletters!)

See comments on Knowledge Entertainment


Knowledge Management Events

12-13 May. Return On Intelligence: Innovative Strategies at Work, Toronto. Strategic Leadership Forum, Toronto Chapter.
http://www.slf-canada.org

18-19 May. Most Admired Knowledge Enterprises 1999. Presentations from Knowledge Leaders as found by the MAKETM survey (see Snippets). London, Business Intelligence:
http://www.business-intelligence.co.uk

25-26 May. Knowledge Management II: Intranets and Beyond, London. Ark Conferences.
Email: info@ark-group.com

26-27 May. International Virtual Company Conference (IVCC '99). Charleston, West Virginia. David Skyrme is speaking at this conference.
http://www.vclink.net

27-28 May. Intangibles: Management, Measurement and Organization. 2nd Intangible Conference, New York City. Contact: Autherine Allison, Stern School of Business, New York University.
Email: aallison@stern.nyu.edu

8-9 June. Managing and Transferring Best Practice, London. Business Intelligence.
http://www.business-intelligence.co.uk

28-29 June. Performance Measurement and Knowledge Management. London. David Skyrme is speaking at this event. Access Conferences.
http://www.access-conf.com

2 July. Managing in the Knowledge-Driven Economy. Bournemouth University Business School. David Skyrme is speaking at this event. Tel: +44 01202 504213

5-9 July. Become a Knowledge Management Expert. International Knowledge Management Master Class, Amsterdam. Kenniscentrum CIBIT and the International Knowledge Management Network:
http://www.cibit.nl/web/cibit/cibitweb.nsf/alldocuments/international_master_class


© Copyright, 1999. David Skyrme Associates Limited and Authors - All rights reserved.

This newsletter is copyright material. In the interests of dissemination of information, forward circulation is permitted provided it is distributed in its entirety including these notices, that it is not posted to newsgroups or distribution lists and that it is not done for commercial gain or part of a commercial transaction. For other uses please contact the publisher.

I3 UPDATE / ENTOVATION International News is a joint publication of David Skyrme Associates Limited and ENTOVATION International Limited - providers of trends analysis, strategic advice and workshops on knowledge management and knowledge innovation®

Email: info@skyrme.com    debra@entovation.com
Web: http://www.skyrme.com    http://www.entovation.com

® Knowledge Innovation is a registered trade mark of ENTOVATION International.