In the new economy, the sustainable competitive advantage of business firms flows from the creation, ownership, protection and use of difficult-to-imitate commercial and industrial knowledge assets. Such assets include tacit and codified know-how, both technical and organisational, whether or not protected by the instruments of intellectual property such as trade secrets, copyrights and patents. Competitive advantage undergirded by such assets can be sustainable to the extent to which it is transferable and useable inside the firm, but difficult for outsiders to access and/or recreate. Knowledge management can be used to describe the panoply of procedures and techniques used to get the most from a firm's knowledge assets. information technology can assist knowledge management, but knowledge management involves much more than the astute use of IT tools. In particular, knowledge management requires the development of dynamic capabilities... the ability to sense and then seize opportunities quickly and proficiently. This is especially so in environments characterised by increasing returns, irrespective of the appropriability regime. Companies slow to respond to the new reality will be severely handicapped. (C) 2000 Elsevier Science Ltd. All rights reserved.
