Importance of Knowledge Management in the Current Economic Environment & its Drivers (Abstracted from Beccerra et al)

It is said that the knowledge is the "Key Resource" for a nation's military strength and economic strength.  It is fundamentally different from the traditional key resources of the economist_land, labour and capital. The performance capacity/ survival of any organization in terms of knowledge depend on how well it has been managed_Quality of the Knowledge and Productivity of the Knowledge.

The neglect of knowledge based on people and ideas can result in reduction of corporate market place's capability and sustainable competitiveness. Therefore it is important that an organization manages its people and ideas/ knowledge resources in order to successfully manage the core of the business.

Today, organizations rely on their own decision makers to make "mission critical" decisions based on inputs from multiple domains. The following four underlying trends increase the stakes in the decision making scenario in today's economical context.

1. Increasing Domain Complexity- The complexity of underlying knowledge is increasing. As a direct consequence, the complexity of the knowledge that is required to complete a specific business process task has increased.

2. Acceleating Market Volatility- The pace of change or volatility within each market domain has increased rapidly, increasing competitiveness and rate of innovation in the market place.

3. Increased Rate of Responsiveness- The time required to take actions based on changes within and across domains is decreasing. Rapid advance in technology continually changes the decision making landscape, making it imperative that decisions be made and implemented quickly before the window of opportunity closes.

4. Diminishing Individual Experience- High employee turnover rates have resulted in individuals with decision making authority having less tenure within their organizations than ever. 

In short, KM is important for organizations that continually face downsizing or a high turnover percentage due to the nature of the industry. KM is important for all organizations because today's decision makers face the pressure to make better and faster decisions in an economic environment characterized by high domain complexity and market volatility.