Innovations are created primarily by investment in intangibles. When such investments are commercially successful, and are protected by patents or first-mover advantages, they are transformed into tangible assets creating corporate value and growth.

–- Baruch Lev, Intellectual Capital Guru

Innovation is one of the key factors that determine an organization’s competitiveness, productivity, output and employment performance. Regardless of this, organizations are still looking for ways to exactly determine how this process takes place. Innovative efforts include the search for, and the discovery, experimentation, and development of new products, services, production processes, and organizational structures. To achieve these things effectively, organizations should combine their innovative efforts strategically with competitive orientation and consequent movements. However, this combination depends significantly on the highest level of individual knowledge and its technological basis. Today, many organizations are taking into account, new technologies and management approaches which are changing the traditional perspectives of managing intellectual resources.

With the emergence of the knowledge-based economy, organizations are realizing the fact that knowledge is a resource, requiring explicit and specific management policies to be processed proficiently. Among other targets, the role of knowledge management is to foster all types of firm innovation, be it organizational process or product-oriented and to improve firm productivity and its medium and long-term competitive advantages.

In today’s modern knowledge-based economies, firms are increasingly dependent on individual and collective knowledge as the major factors required to improve their performance. Against this background, the paper “Knowledge Management: Focus on Innovation and Labor Productivity in a Knowledge-Based Economy” by Madalina Constantinescu, analyzes the impacts and dimensions of Knowledge Management (KM) upon innovation and labor productivity within the organization, and the way in which they affect the firm’s innovative performance. The research observes that KM practices on firm performance are, in general, statistically and economically significant and more or less cumulative, even while controlling firm size, industry and other important factors such as R&D intensity and physical capital intensity. The objective of the paper is to draw attention to the important issues of technology in capturing, codifying and disseminating knowledge througout the organizations. It reflects the need to store, not just different forms of knowledge, but different types of knowledge.

The next paper, “The Variable Time: Crucial to Understand Knowledge Economics” by Bhekuzulu Khumalo, attempts to highlight the importance of time in economics, particularly knowledge economics, which looks into the primary commodity—knowledge. The research observes that though time has always been considered in relation to motion, this motion had nothing to do with human beings. Thus, time has always been considered as a constant movement into the future. Society gains knowledge because of human desire, and a society refuses knowledge because of the norms of that society. Time dilation occurs because of the human desire to seek knowledge. This human effect on time can only be seen when time is taken as an independent variable. Time dilation occurs, be it theoretically, like the twin flying to space and on its return finding its sibling older, or in reality, like in knowledge economics.

The research concludes that the more complex societies become, the more specialization there is, and the more is the knowledge that is gathered in that particular field. However, people must understand that all disciplines are connected. A narrow view will not bring about an increase in knowledge. Though the concept of time has been dealt with thoroughly, there is still one more crucial point to understand—the reversibility of time. For us to understand knowledge economics thoroughly, and to understand economics in general, and societies at large, we need to consider a subject matter, that is now receiving serious attention from physicists, and that is the question of the reversibility of time.

Open source is becoming a way to generate business in the software industry. As interest about business models for open source has steadily grown, software companies are increasingly examining whether their current licensing scheme fits their business models. The concluding paper, “Open Source Licensing and Business Models” by Alberto Onetti and Sameer Verma aims at shedding light on the enterprise side of open source software. It is, in part, developed by freelance programmers who create freely distributed source code by collaborating and communicating over the internet. In this model, companies produce and resell open source software, or provide professional services around open source software as their core activity. The paper discusses at length, the impact of licensing on different business models adopted by software vendors.

-- N Janardhan Rao
Consulting Editor