Knowledge Creation is at the Heart of Innovation

“The raison d’etre of a firm is to continuously create knowledge” – so say Nonaka and Takeuchi, creators of the most dominant theory on how organisations create knowledge. This sentiment is echoed by Peter Drucker, probably the most famous and respected thinker on management: “knowledge is the only meaningful resource”. And yet, in current discussions on the building of a smart or knowledge economy in Ireland, the focus is on innovation. So what is the relationship between knowledge and innovation?
Schroeder and Van de Ven provide the following definition:
The process of innovation centers on the temporal sequence of activities that occur over time in developing and implementing new ideas from concept to concrete reality’.
There are two major components to innovation – coming up with ideas and designs for something new, and implementing them in a ‘concrete’ way. The first of these is implicitly tied to knowledge – it takes knowledge of problems and possible fragments of a solution to come up with ideas and designs, and those ideas and designs are themselves new knowledge.
Therefore, innovation at an organisational level requires knowledge creation at an organisational level. I have just completed a white paper outlining Nonaka and Takeuchi’s framework of knowledge creation – the SECI framework. This should be of interest to anyone promoting innovation and knoweledge creation in their organisations and is available here