The Knowledge-Creating Company

In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge. When markets shift, technologies proliferate, competitors multiply, and products become obsolete almost overnight, successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products. These activities define the “knowledge-creating” company, whose sole business is continuous innovation.

And yet, despite all the talk about “brainpower” and “intellectual capital,” few managers grasp the true nature of the knowledge-creating company—let alone know how to manage it. The reason: they misunderstand what knowledge is and what ...