Knowledge And Innovations In Knowledge Management

terial objects” (Howitt, 1996). In the evolutionary theory, Davenport and Prusak define knowledge as “a fluid mix of framed experience, values, contextual information and expert insights that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers” (Davenport and Prusak, 1998).

So knowledge and innovations are probably the most important factors of long-run growth. And this brings us to quite important practical implication: to compete successfully in knowledge-based economy it is essential to accumulate knowledge, to manage it effectively and to innovate.

1.2. Knowledge management. History and theoretical aspects

Effective knowledge management has been considered by a number of scholars and practitioners as a curtail component of competitive strategy in last years (King, 2001; Ofek and Sarvary, 2001; Ndlelaand and du Toit, 2001). In accordance with Skyrme (2001) knowledge management is ‘the explicit and systematic management of vital knowledge – and its associated processes of creation, organization, diffusion, use and exploitation’. Knowledge management principles have been studied and implemented in every organization discipline and profession in recent years; as a result this field has been developing very rapidly in recent years (Kebede, 2010).

The history of knowledge management goes back to the first civilizations. The palace archives of Sumer and Akkad and the voluminous cuneiform archives discovered recently at Ebla in Syria, all more than 4,000 years old, were actually the first attempts to organize the accumulated knowledge of civilization, so that the priceless information contained in there could be used for benefit of future g...

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.... In this stream, organization, strategy, and people have become central issues in knowledge management.

It is important to mention that knowledge management is emerging discipline. For the moment there is no agreement between researches on universal framework. But there are some models which have received much attention. One of them is Nonaka and Takeuchi’s (1995) SECI model. This model is a part of process-based school of knowledge management. The cornerstone of SECI model is knowledge creation and transfer. The process of knowledge transfer is viewed as “knowledge spiral” (see Figure 1), which represents the knowledge transfer activities of socialization (tacit to tacit knowledge transfer), externalization (tacit to explicit knowledge transfer), combination (explicit to explicit knowledge transfer), and internalization (explicit to tacit knowledge transfer).