The importance of Knowledge Management

Global economy is increasingly being characterized as a "knowledge economy". Knowledge is considered the main distinguishing factor of business success and is seen as the foundation of competitive advantage. All over the world, companies are making a fundamental shift in their corporate value system, away from physical and financial assets towards the creative exploitation of intangible assets and competences.

Companies no longer compete on the basis of tangible assets of materials and labor but on intangible assets. The differentiating element in the "knowledge economy" for companies to compete is usually the capability differential harnesses from intangible resources. The value incorporated in products and services is mainly due to the development of organizational knowledge resources. In today's business environment, companies need to know what they have in terms of knowledge resources and competencies, and how they can use them more effectively to gain or sustain competitive advantage.