Many organizations today are beginning to realize the true impact of the knowledge economy. Alvin and Heidi Toffler states “this new civilization has its own distinctive world outlook; its own ways of dealing with time, space, logic and causality. Its own principles for the politics of the future”.

In the knowledge economy, “Intellectual Capital or more specifically Corporate Knowledge is often said to be “the last and probably only sustainable competitive advantage” in business. However, many organizations including large multinational organizations have made numerous mistakes in managing their corporate knowledge. Following the advice of technocrats, they tried to capture the knowledge that lies within the heads of the employees and document everything into a database without realizing that this method of managing corporate knowledge would not be of much help.

Firstly, most knowledge that is critical to decision making is tacit. It is a combination of experience, know-how, know-what and is contextual. Secondly, knowledge in a database does not equate to the need to use or ability to use it. Thirdly Knowledge cannot be categorized to suit everyone’s needs. It is like looking for information on the Internet using search engines, ultimately you still need to decide what is suitable and what is not.

Therefore in the Knowledge Economy, it is the human factor that is playing the major role. This is not implying that the role of raw materials, process and machines are insignificant. However the distinction here is also not that the humans are important for their ability to carry out laborious work. It is for their ability to imagine, create and innovate on their knowledge and new knowledge. Only humans can make sense of what are data, information and knowledge. Only a human can place knowledge into a context for used.

In the knowledge economy it is better to have a small group of people who can think, act and adapt compare to a large group who prefers to wait for orders and are highly specialized. The new economy is about change, adaptation, innovating the need to learn, unlearn and relearn. Only a human being has the ability to adapt to such rigor provided he or she chooses to.

To win in the new economy, the organization focus is on its people. Hiring the right person is of utmost important. Once hired provide them the necessary knowledge and skills through training, coaching and mentoring. Always promote the power of teamwork and the need to share knowledge and appreciate the differences in the team. Empowering them, give them opportunities to prove themselves and always reward and recognized them based on their performance.

The knowledge worker is the organization’s edge in the new economy, not money, machineries or processes. It is the people with the right knowledge.