Continuity Management: Preserving Corporate Knowledge and Productivity When Employees Leave

Chapter 2. Knowledge as a Capital Asset

Over the past 50 years, knowledge has replaced capital as the scarce factor of production, becoming the dominant economic factor in business. This dramatic shift in the value of organizational knowledge underlies the current knowledge crisis and the solution to it. In the Industrial Age, physical labor based on manual skills was the source of economic growth and the ability to perform such labor the key to employment. Knowledge was virtually synonymous with a set of skills—often limited—applied day in and day out on the assembly line or in a similar work environment. Knowledge, therefore, was something that enabled work.

In the Information Age, on the other hand, intellectual labor based on knowledge is the source of economic growth and the ability to perform such labor the key to employment. Knowledge, therefore, is no longer primarily the means to accomplish work; it has become the work itself. Executives, managers, service professionals and providers, technicians, sales and marketing experts, those who provide administrative support, and other knowledge workers all acquire and disseminate knowledge, which is the basic currency of their jobs. They analyze, summarize, create, hone, expand, or otherwise manage the intangible of knowledge. If the icon of the Industrial Age was a pair of hands, the icon of the Information Age is a pair of minds.

Peter Drucker has written that "the basic economic resource—'the means of production' to use the economist's ...