Division of Interfirm Activities in the Knowledge-Based Economy: The Crucial Role of Knowledge Processors

Division of Interfirm Activities in the Knowledge-Based Economy: The Crucial Role of Knowledge Processors

Poul Houman Andersen (University of Aarhus, Denmark)
DOI: 10.4018/978-1-60566-270-1.ch004
OnDemand PDF Download:


In order to capture market dividends and stay at par with the competition in the knowledge-based economy, firms must constantly develop their skill profile. There is considerable scope for learning through interfirm learning processes. However, the uncertain and costly nature of this process hampers exchange of knowledge in interfirm networks. This opens up for a new form of intermediary specialised in the absorption, generation, and dissemination of knowledge: the knowledge processor. This contribution addresses the core strategic issues faced by this type of firm, and illustrates the process through a case study of a knowledge processor.
Chapter Preview

He who receives an idea from me receives instruction himself without lessening mine; as he who lights his taper at mine receives light without darkening me. (Thomas Jefferson, 1813)



In the current debate, the role of learning and knowledge is repeatedly stressed as a distinguishing feature of the new economic realities. Several contributions point at the importance of knowledge and learning as the true generators of economic growth (Freeman & Soete, 1997; Romer, 1995). Knowledge has always been central to production activities, and it may therefore seem inaccurate to use this term to describe the present state of affairs in economic development as compared to the “old economy.” However, a distinguishing mark today is that firms can no longer rely on a relatively stable set of skills and resources for capturing market dividends, but must constantly renew their knowledge for to stay at least at par with the competition (Lundvall & Foray, 1996).

The single most important distinguishing factor of the learning or knowledge-based economy1 is the widespread utilisation information and communication technology networks, which has made possible an economy in which trade and specialisation are driven by the supply-side learning behaviour of specializers (Storper & Salais, 1997). Maintaining competitiveness is increasingly linked to the range and speed of innovation in the globalizing marketplace. The competitive stance of the single firm hinges upon its ability to outpace the imitation and catch-up attempts of competitors by constantly renewing and generating knowledge as well as capturing knowledge from intellectual property rights. Interfirm interaction plays a crucial role in such learning processes (Lundvall, 1993). In order to survive the race for innovation and technological flexibility, firms seek external partners to exchange and develop technological capabilities (Andersen & Christensen, 2000).

Behind the alleged growing importance of learning in the economy, a new rationale for explaining interfirm division of labour is arising. Whereas traditional theory explains segregation of firm activities from potential efficiency gains from deepened specialisation, recent thinking in knowledge-based economy may explain division of labour based on incentives to learn rather than achieving gains from specialisation. This chapter contributes to this discussion by conceptualising one particular role in this new scheme of coordination: the knowledge processor. The particular competence of this firm is in the area of identifying potential learning synergies between firms with complementary learning profiles. Taking on a case study of Cotas Computer Technology, a Danish developer and manufacturer of advanced electronic control systems within the machining industry, we follow an example on how this strategic role can evolve and become organised. We use this to address more fundamental issues in the knowledge-based economy pertaining to property rights and governance structures. An overview of the chapter is provided in Figure 1.

Figure 1.

Complete Chapter List

Search this Book:
Patricia Ordóñez de Pablos
Table of Contents
Chapter 1
Jakob Lauring, Toke Bjerregaard
This chapter deals with the role of language use and knowledge sharing in the context of international subsidiaries. The chapter analyzes the role... Sample PDF
Knowledge Sharing and Sociality: On the Linguistic Embeddedness of Knowledge Exchange in International Subsidiaries
Chapter 2
Ruth Alas
This chapter analyzes organizational changes and organizational learning in Estonian companies. During the last decades, Estonia has transformed... Sample PDF
Organizational Learning During Changes in Estonian Organization
Chapter 3
Giovanni Schiuma
Today’s global business is characterised by interconnectedness, interdependence, and an increasing level of complexity that force organisations to... Sample PDF
Strategies for Assessing Organisational Knowledge Assets
Chapter 4
Poul Houman Andersen
In order to capture market dividends and stay at par with the competition in the knowledge-based economy, firms must constantly develop their skill... Sample PDF
Division of Interfirm Activities in the Knowledge-Based Economy: The Crucial Role of Knowledge Processors
Chapter 5
Luiz Antonio Joia, Paulo Sérgio da Silva Sanz
Since the early 1990s, research has been conducted in an attempt to establish a viable and reliable manner of measuring the intangible assets, also... Sample PDF
The Conundrum of Valuing a Company's Intellectual Capital: The Role of Taken-for-Granted Indicators
Chapter 6
Tongo Constantine Imafidon
This chapter avers that over the past years, monolithic organizations, as opposed to multicultural organizations, have been created by many top... Sample PDF
The Multicultural Organization: A Historic Organizational Theory for Gaining Competitiveness in Global Business Environment
Chapter 7
Arla Juntunen
This chapter focuses on the challenges of developing a knowledge management platform to support organizational memory and knowledge transfer. The... Sample PDF
Developing a Corporate Memory as a Competitive Advantage in the ICT-Sector
Chapter 8
Corrado lo Storto
This chapter reports the findings of an empirical study whose purpose is to identify the attributes of the organization infrastructure that support... Sample PDF
Learning Organizations or Organizations for Learning? How Small Firms can Learn from Planned and Random Technical Problem-Solving: Implications for Technical Education
Chapter 9
Ernesto Villalba
The present study explores the relationship between the knowledge-enabling environment and the demand of training in 18 small private companies... Sample PDF
Learning at the Core: Knowledge Management as an Employer Strategy for Lifelong Learning
Chapter 10
Dimitris Bibikas, Iraklis Paraskakis, Alexandros G. Psychogios, Ana C. Vasconcelos
The increasing pressure of today’s highly globalised markets has lead organisations to continuously compete for knowledge and innovation. Despite... Sample PDF
An Integrated Knowledge Innovation Process Management Model: The Case of Skandia
Chapter 11
Christian Nielsen, Robin Roslender, Per Nikolaj Bukh
During the last decade, many calls for improving disclosure practices, in relation to intellectual capital and intangibles, have been uttered in the... Sample PDF
Intellectual Capital Reporting: Can a Strategy Perspective Solve Accounting Problems?
Chapter 12
Huei-Chen Hsu
The main points of this chapter are probing for the combination of information technology and virtual work, and how to change the distribution of... Sample PDF
Managing the Information Technology: Knowledge Transfer in Virtual Teams
Chapter 13
Miltiadis D. Lytras, Patricia Ordóñez de Pablos
Multinational companies (MNCs) are facing important challenges within the current economic context. Rapid technological changes, the globalization... Sample PDF
The Building of the Intellectual Capital Statement in Multinationals: Challenges for the Future
Chapter 14
Pedro López Sáez, José Emilio Navas López, Gregorio Martín de Castro
During more than a decade, the literature has provided several intellectual capital models. Nevertheless, empirical evidence is still necessary in... Sample PDF
Intellectual Capital in Knowledge-Intensive Firms: Exploring the Concept and Main Components in Boston's Route 128
Chapter 15
Weiling Ke, Kwok Kee Wei
This chapter uses organizational learning as a lens to study how firms implement the enterprise system. The core research questions are: What are... Sample PDF
Organizations and Learning Process: Its Antecedents and Consequences in Enterprise System Implementation
Chapter 16
Kholekile L. Gwebu, Jing Wang
Improvements in technology have led to innovations in training such as Electronic Learning (E-learning). E-learning aims to help organizations in... Sample PDF
The Role of Organizational Environmental, and Human Factors in E-Learning Diffusion
Chapter 17
Mikel Sorli, Dragan Stokic
Managing of knowledge for innovation in an extended enterprise (EE) environment is a key issue. This in turn requires effective utilization of... Sample PDF
Supporting Innovation Through Knowledge Management in the Extended Enterprise
Chapter 18
Luis Felipe Luna-Reyes
Contemporary organizations face the challenge of growing and advancing in a complex and changing environment (Johannessen, Olaisen, & Olsen, 2001;... Sample PDF
Government Innovation Through Knowledge Management
Chapter 19
Marc Henselewski, Stefan Smolnik, Gerold Riempp
Today’s business environment is characterized by highly transparent markets and global competition. Technology life cycles are decreasing due to the... Sample PDF
A Technology-Focused Framework for Integrating Knowledge Management into Strategic Innovation Management
About the Contributors