Information and Communication Technology: Tacit Knowledge and Innovation

Abstract

Tacit knowledge is recognized as playing a key role in determining the extent to which companies are able to create and sustain competitive advantages. However, investments in ICT may lead to a de-emphasizing of tacit knowledge with devastating consequences. Emerging empirical evidence have indicated a lack of support for the positive economic impact of investments ICT. We have argued that this may be due to the mismanagement of knowledge. This mismanagement is first of all created by an imbalance between the emphasis on tacit- and explicit knowledge, often manifested trough firms ICT-strategies prior to investing in ICT. A central point in this is article the focus on establishing the right balance between tacit and explicit knowledge. Central in our argument is the creation of a learning loop where by continuos innovation enhance a higher level of learning by doing-using-, experimenting-, and interacting, creating a positive spiral. To create such learning loop, there is a need to link the company’s tacit knowledge to the company’s external knowledge base by the use of ICT. However, this need to be accompanied by a sensitivity to change and the creation of external meeting places, in order to promote innovation, which in turn promotes performance and enhances a higher level of learning by doing-, using, experimenting—and interacting. The learning loop also improve the company’s sustainable competitive advantages, by limiting competitors possibilities for imitation (througha higher level of tacit knowledge), and by increasing continuous improvements, innovation and performance.