The Impacts of Information Technology on the Stock and Flow of a Firm's Intellectual Capital

Abstract

In this theoretical chapter, we examine the contribution of IT systems and tools to the emergence and use of different types of knowledge in a firm. We divide knowledge into explicit, tacit and potential and argue that these three types of knowledge characterize firms’ three main functions - operational effectiveness, gradual development, and innovation, respectively. On the basis of our examination, we conclude that the main part of IT applications serves dissemination, storing and acquisition of explicit knowledge. However, there are also some tools that serve the elicitation of tacit and potential knowledge and the conversions between tacit and explicit knowledge. At the end of the chapter, we evaluate more generally the potential provided by IT. We argue that the addition of “a human touch” to the information produced and conveyed by IT is an emerging issue. We present two ways in which this can be done: the use of IT for the development of social capital in a firm, and the use of external experts—knowledge-intensive business services (KIBS)—as supporters in firms’ knowledge functions linked to IT.