Overview Knowledge Based Economy Malaysia Commerce Essay

Knowledge is defined as information combined with experience, context, reading, and contemplation ( Davenport et al. , 1998 ) . Knowledge defined as objects, constructs that are assumed exist around in people in same involvement countries. Knowledge is normally distinguished from informations and information ( Zack, 1999 ) . Data is a sort of natural informations which does non straight meaningful. Raw information refers to a aggregation of Numberss, characters, images or other end products from devices to change over physical measures into symbols, which are unrefined. Such informations after farther processed by homo will go meaningful which is information. In add-on, cognition is result from interpreted information, apprehensions of combination of informations and information, expertness, and accomplishments which acquired by a individual through twelvemonth to twelvemonth experiences.

Further, cognition can be silent or expressed ( Lave & A ; Wenger, 1991 ) . For silent cognition, it is personal, context-specific cognition that is hard to formalise, record, or articulate, it is stored in the caputs of people ( Tiwana, 2000 ) . Tacit cognition is non available as text, it is hard to show to others. It involves human personal beliefs, experiences, and values. For expressed cognition is that constituent of cognition that can be codified and transmitted in a systematic and formal linguistic communication, paperss, database, webs, e-mail, charts, etc ( Tiwana, 2000 ) . In contrast, expressed cognition is more exactly and officially articulated, it can be transferred to others in a comparatively straightforward mode. Explicit cognition considers is the most of import factor of production in cognition economic system.

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What is the cognition economic system? “ A knowledge-driven economic system is one in which the coevals and development of cognition play the prevailing portion in the creative activity of wealth ” ( United Kingdom Department of Trade and Industry, 1998 ) .

Knowledge economic system besides defined as economic system of cognition which focused on the production and direction of cognition. From the past, neo-classical economic science has merely focused on production of labor and capital as their chief factor. Presents, neo-classical economic system acquiring transform into knowledge-based economic system by start replacing capital and energy into information and cognition as their primary wealth-creating assets. In the words of Dr. Mahathir: “ In our chase towards developing the K-economy, cognition has to replace labor and capital as the cardinal factors of production in our economic system. The challenge for Malaysia is to develop this cognition amongst our citizens so that our success will be due to the parts of Malayan endowments and cognition workers ” ( Dr. Mahathir bin Mohamad, Putrajaya 8 March 2001 advertizement in the New Straits Times 13-04-2001 ) .

As we enter the twenty-first century, Malaysia ‘s economic system is presently altering into cognition based economic system since proclamation a long term undertaking called Vision 2020, which was a program turn Malaysia to a to the full developed state and cognition rich society through the development of ICT sector. Harmonizing to Mahathir “ some have wondered why 2020 and non some other twelvemonth. As a physician I am attracted to the optometrist measuring of vision ; 2020 indicates 100 per cent good vision in both eyes. Our 2020 vision for Malaysia implies this clear vision of where we want to travel and what we want to be ” ( Mohamad, 2007 ) .

To accomplish the aims of Vision 2020, switch Malaysia economic system into knowledge-based economic system to increase rapid rate of economic system growing and heighten international fight is really of import. The cognition based economic system will be the chief cardinal point to beef up Malaysia ‘s capableness to introduce, create and design own autochthonal engineering, develop and establish new merchandises in the market. In add-on, the cognition will be cardinal factor contribute to Malaysia ‘s economic system growing and able to accomplish sustainable gross domestic merchandise growing rate as good. Furthermore, our old premier curate Dr. Mahathir Mohamad said “ during the Eight Malaysia Plan period, we will be faced with even greater challenges from globalisation and liberalisation every bit good as the rapid development of information and engineering. We will hold to switch the growing scheme from being input-driven towards one that is knowledge-driven ” ( Abdulai, 2004 ) .

Therefore, Malaysia has integrated the development of Knowledge-Based Economy construct into its new vision policy in order to accomplish our Malaysia Vision 2020. Malayan were encouraged to better the quality of instruction and preparation to larn extremely skilled and knowing work force in order to back up the development of a knowledge-based economic system. To develop a Knowledge-Based Economy as a “ strategic move to raise the value added of all economic sectors and optimising the learning ability of the state: and 2 ) . “ beef uping human resource development to bring forth a competent, productive, and knowing work force. ” ( Abdulai, 2004 ) .

Besides, Malaysia authorities has been high involved in this procedure displacement Malaysia towards Knowledge-Based Economy by set up establishments, substructures, and infostructures that will assist travel the state towards a KBE with the establishing Multimedia Super Corridor ( MSC ) and National IT Agenda ( NITA ) organized by Malaysia authorities. The aims to establish this undertaking is formulate schemes and advance the use and development of IT, the cardinal enabler of a knowledge-based economic system by create an ideal IT and multimedia environment every bit good as enable Malaya to be in the mainstream of activities necessary to pull cognition workers, technopreneurs and high-technology industries.

Furthermore, there are some academic research workers analyzing Knowledge Management and Knowledge-Based Economy development in Malaysia. A major attempt is the book Malaysia and K-economy ( 2001 ) by a figure of faculty members of the Multimedia University of Malaysia. Besides, a figure of local surveies on some ICT developments which related advanced pattern are besides reported in the Proceedings of the Asia Pacific Economics and Business Conference 2002 ( UPM ) . There is besides a paper measures knowledge-based economic system accomplishment through the skilled labour parts to Malayan fabrication sector productiveness growing ( Elsadig et al, 2003 ) . This surveies seeking to turn out that Knowledge-Based Economy truly contributed to a developed state in assorted sectors development such as fabrication sector, ICT sector.

As we know, the transmutation towards Knowledge-Based Economy is started in Malaysia. Many organisations realize the of import cognition that will impact an organisation operation hereafter. Knowledge will play of import function factor of affect organisation production instead than the labour work forces, capital. Nowadays, cognition direction is non merely used in ICT authorities sector, it besides widely used in private cordial reception industry. In this service industry, cognition is really of import in order to supply latest information which client require instantly. With cognition, they able to assist client work out hard job in limited clip constrain due to every minute of clip is equal to money of client. In add-on, we know that some industries have confronting high turnover work force. Recruit new staff to take over the occupation place is non ever the effectual manner. Therefore, they are merely depending on past certification which is expressed cognition left by old staff. Yet, it is hard to transform silent cognition into certification as mentions for future used. That ‘s why the of import of larning cognition direction there are. There is an illustration in below:

“ In an industry where there is extremely turnover, knowledge direction besides helps convey our staff up to rush quicky and we achieve the acquisition processes documented and disseminated rapidly. ” ( Cherly, 2008 ) .

As the turning demand for knowledge-based merchandises and services is altering the construction of the planetary economic system, the function of cognition in accomplishing competitory advantage is going an of import direction issue in all sectors.

The spread between a company ‘s market value and its touchable plus value is widening ; the key variable explicating this spread is a house ‘s stock of cognition. Unlike land, labour, and capital – the economic expert ‘s traditional, finite factors of production – cognition and thoughts are infinite economic goods that can bring forth increasing returns through their systematic usage ( Kim & A ; Mauborgne, 1999 ) . Though at that place small consensus as to what knowledge really is, many do accept that cognition is a primary competitory factor in concern today ( Dzinkowski, 2000 ) . A study conducted by the Canadian Institute of Chartered Accountants ( CICA ) shows that the top executives of both the Canadian Financial Post 300 houses and US Fortune 500 houses view knowledge resources as critical for a house ‘s success.


Knowledge is defined as information combined with experience, context, reading, and contemplation ( Davenport et al. , 1998 ) . Knowledge is normally distinguished from informations and information ( Zack, 1999 ) . Knowledge is believed and valued on the footing of the meaningfully organized accretion of information through experience, communicating, or illation. Knowledge can be viewed both as a thing to be stored and manipulated and as a procedure of at the same time cognizing and moving – that is, using expertness ( Blackler, 1995 ) .

Alternatively, Knowledge is non merely embodied in goods and services, peculiarly in high engineering industries, but besides it is a trade good itself, manifested in signifiers such as rational belongings rights or in the silent cognition of extremely nomadic key employees. Knowledge includes information how the manner to interact every bit persons as community. Knowledge unlike land, labour, and capital – the economic expert ‘s traditional, finite factors of production – cognition and thoughts are infinite economic goods that can bring forth increasing returns through their systematic usage ( Kim & A ; Mauborgne, 1999 ) . It is a public good and sharing with others involves zero fringy cost. Though at that place small consensus as to what knowledge really is, many do accept that cognition is a primary competitory factor in concern today ( Dzinkowski, 2000 ) . In add-on, engineering discovery based on cognition creates proficient platforms that support farther inventions and drive economic growing ( Bank Negara, 1999 ) . The tabular array below will demo the model classs of cognition:


As the turning demand for knowledge-based merchandises and services is altering the construction of the planetary economic system, the function of cognition in accomplishing competitory advantage is going an of import direction issue in all sectors. Therefore, the rapid creative activity and airing of cognition and information is really of import to the organisation. If cognition is non decently maintained, information could go misconstrued or vanish all together. When information is stored within single heads, the care of this cognition becomes more complex. The retrieval and distribution of information are the most of import facets of organisational memory. Persons must be motivated in order to recover and pass on information. A major job within many organisations is the fact that employees view cognition as a method of procuring their occupations and are loath to portion their cognition with others. Nowadays, many organisation and endeavor are recognizing how of import to do maximal usage of cognition among their staff. These cognition can be database cognition, work past experiences, human cognition based. It is difficult to maintain path of and do usage of all of the parts cognition. The organisation involvement to cognize what are the cognition assets and how to utilize and pull off this cognition plus to acquire high return in the hereafter. Most of the organisation in Malaysia merely focused on labour, capital and touchable plus as their primary cognition assets. They are loses sight of cognition Management as their primary of import cognition assets. Merely, few organisations to the full realize the benefits from extremely valued cognition.

However, organisations acquiring alteration, development, position cognition direction as portion of their concern scheme. Due to organisation found that, to success in addition competitory market place is to the full depends on the quality of the cognition by how to use it in the concern procedure. Knowledge direction has besides been described for its possible function in making sustained competitory advantages for organisations ( Grant, 1996 ; Johannessen & A ; Olsen, 2003 ; Lado & A ; Wilson, 1994 ) . Such as apply cognition on low cost leading scheme by the manner of cut cost, lower the merchandise monetary value, cut down or extinguish stairss in the fabrication procedure that are unneeded or duplicated procedure rhythm in order to hold a alone characteristic to distinguish organize the rival. This is the manner how to use cognition in cost leading scheme and distinction scheme into concern field to derive competitory advantages in the competition market place. Knowledge direction non merely the benefits of decreased costs and rhythm clip, but besides develop valuable cognition that anticipates of future buyer/seller behaviour. Besides, cognition direction use on innovation-based distinction scheme to make new invention merchandise to able differentiate from rivals to derive competitory advantages.

However, there is a challenge of deploying the cognition assets of an organisation to make competitory advantage such as the market place is increasing competitory and the rate of invention, cognition should be evolve and procedure at even faster rate by an organisation in order to catch up with the tendency of the market. Furthermore, cognition takes times to see and get. An organisation does non hold adequate clip to supply this sort of cognition direction preparation and increase formal cognition direction to the staff. Leading loss of cognition due to staff retirement earlier is one of the grounds. The experience from the retire staff may non be reassign the tacit cognition to the fresh staff. It is hard to bespeak experience staffs turn their tacit cognition into explicit cognition which is documentation signifier for mentions use in future. Sometimes, altering in scheme way may ensue in the loss of cognition in a specific country. For case, a subsequent reversal in policy may so take to a renewed demand for this cognition, but the employees with that cognition may no longer be at that place.

A assortment of factors have been shown to hold an of import consequence on the ability of organisations to get sustained competitory advantage, including the comparative capableness development of a house ( Johannessen & A ; Olsen, 2003 ) , and a house ‘s ability to distinguish its merchandises ( Johannessen & A ; Olsen, 2003 ; Teece et al. , 1997 ) . Research on KM and competitory advantage has emphasized ‘description, instead than empirical survey ‘ KM can take to such an advantage ( Holsapple & A ; Singh, 2001 ; Ndlela & A ; Toit, 2001 ) .

The current competitory environment is driven mostly by the outgrowth of the cognition society, where as Drucker has described ( Drucker, 1992 ) , organisations move from productiveness based on “ brand and move ” to one based on “ cognition and service ” . The outgrowth of this “ cognition epoch ” is radically altering what creates value in organisations, whereby the long-run viability and prosperity of an organisation progressively depends on its direction ‘s ability to leverage the concealed value of its intangible assets.

Resource-based has emerged as a cardinal competitory precedence in many organisation activities including corporate scheme ( Clemons, 1991 ) , information engineering capableness ( Mata, Fuerst, & A ; Barney, 1995 ) , and KM. Resource-based is defined as the resources and capablenesss possessed by viing houses that may differ, and these differences may be long lasting ( Barney, 1991 ; Rumelt, 1984 ; Wernerfelt, 1984 ) . From the resource-based position, knowledge direction research workers have identified assorted KM related resources that serve as possible beginning of competitory advantage. For illustration, Gold et Al. ( 2001 ) notes that technological resource, structural resource, and cultural resource are rate and house particular and hence likely to function as beginnings of organisational capableness.

Along with competent KM accomplishments, Lee and Choi ( 2003 ) point out that the relationships between cognition enablers ( civilization, construction, people, and engineering ) and organisational public presentation. Likewise, in furthering research docket of cognition direction, Grover and Davenport ( 2001 ) and Okunoye and Karsten ( 2002 ) depict the scheme, construction, civilization, and engineering as the primary beginnings of its concern growing and improved fight. Furthermore, an organisations with strong societal KM resources are able to ( 1 ) incorporate the KM and concern planning processes more efficaciously, ( 2 ) develop dependable and invention applications that support the concern demands of the house faster than competition, ( 3 ) predict hereafter concern demands of the house and introduce valuable new merchandise characteristics before rivals. The societal KM resources ability to promote the many-sided activities associated with the successful execution of cognition direction has been found to be a cardinal separating factor of successful houses ( Lee & A ; Choi, 2003 ) .

In fact the broad difference in competitory organizational and economic benefits that companies get from KM has been attributed mostly to their societal KM resources ( Lee & A ; Choi, 2003 ; Miller & A ; Shamsie, 1996 ) . KM resources are complex to derive and hard to copy when there is single. To accomplish competitory advantage through Knowledge Management, organisations have besides learned how to unite efficaciously their KM resources to make an overall KM capableness.


We were more understanding about what Knowledge is, how cognition of import to contribution economic system growing, how cognition direction benefits to the organisations and how knowledge direction may be suitably viewed as an organisational capableness.

Before we started, we have done many researches about what really Knowledge-Based Economy is. We besides found out how Malaysia started to alter towards Knowledge-Based Economy, what is the chief factor to hold this Knowledge-Based Economy development. Since debut of the Seventh Malaysian Plan ( 1996-2000 ) , it is the attempt towards switching Malaysia to a knowledge-based economic system. That ‘s why it is of import to understand the preparedness of Malaysian higher educational establishments to back up knowledge-based economic system.

In add-on, the parts to the development of the Malayan Knowledge-based economic system have come mostly from the authorities policy shapers, direction advisers and bourgeoiss. It proved that cognition play an of import function to alter our state, society from traditional to knowledge-based.

In decision, the challenge of globalisation and a knowledge-based epoch has made it critical for Malaya to travel towards a Knowledge Based Economy. Knowledge Based Economy will show the ways to accomplish sustainable rapid growing and stay globally competitory in the medium and long term and it will convey up our state towards Vision 2020 and turn Malaysia to a to the full developed state and cognition rich society.


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