Firms create value as a basis for their sustainability in two ways: physical transformation of inputs into high value outputs or arbitrage. This involves either cross-place arbitrage which is trade or cross-time arbitrage which is speculation. Modern economies driven by globalisation and fierce competition in which competitiveness is no longer determined by the possession of scarce capital and abundance of cheap labour but the utilisation of knowledge asset which improves with usage. In that context, knowledge-intensive services organisations stand to thrive and prosper testimony of the structural shifts in the sectoral contributions to GDP of many countries. Through conceptual analysis of documents, articles and reports, this paper suggests that emerging economies with abundant highly educated and skilled manpower coupled with natural resources endowment can leverage knowledge management as a core competency to catapult their services industry. This goal requires an understanding of critical success factors that drive successful organisational knowledge management strategies.
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Globally there have been marked policy interests in the services economy. This trend is the result of countries becoming more service-oriented and coupled with the realisation that the services sector’s contributions to gross domestic product and employment have been growing steadily. Services are heterogeneous economic activities that are not directly associated with the manufacture of goods, mining or agriculture. Acharya (2006), argues that services are economic activities that involve the provision of human value in the form of labour, advice, managerial skill, training, entertainment, sale and distribution of goods, intermediation as well as dissemination of information. A distinctive feature of services provision is their intensive use of information and communication technology (ICT) and related knowledge-based resources. Services are broadly classified into two categories, business sector and non-business sector services. Business sector services include trade, hotels and restaurant, transport and storage, post and telecommunications, financial intermediaries, real-estate, renting and related business activities. While non-business sector services include public administration and defence, compulsory security services, education, health and social work, other community, social and personal services.
The advent of bundling of services with products for example Software and computers have resulted in the explosive growth in computer-based technology. This trend is visible in major product-services nexus where the purchase of a product is accompanied with a service level expectation (OECD, 2000). As a result outsourcing as a business strategy has seen phenomenon growth as new companies emerge with core competencies in specialised services to better position themselves in their industries. In this context, Knowledge-intensive business (KIBS) services have become crucial in the creation and commercialisation of new products, services and processes be they technological or managerial (Kuusisto & Meyer, 2002). KIBS are firms that mainly supply knowledge-intensive goods and services for other business firms for example Accounting, IT and other consulting firms. Further the emergence of internet and electronic commerce has also become major sources of industrial revolution and business competitiveness in ways that were earlier unthinkable. Besides, the general international lowering of barriers to trade in services is also a major source of services industry competitiveness as companies become global players.