The idea that knowledge has value is ancient. In the 1st century AD,

Juvenal Decimus Junius Juvenalis (), known in English as Juvenal ( ; 55–128), was a Roman poet. He is the author of the '' Satires'', a collection of satirical poems. The details of Juvenal's life are unclear, but references in his works to people f ...

(55-130) stated “All wish to know but none wish to pay the

price A price is the (usually not negative) quantity of payment or compensation expected, required, or given by one party to another in return for goods or services. In some situations, especially when the product is a service rather than a ph ...

". In 1775,

Samuel Johnson Samuel Johnson ( – 13 December 1784), often called Dr Johnson, was an English writer who made lasting contributions as a poet, playwright, essayist, moralist, literary critic, sermonist, biographer, editor, and lexicographer. The ''Oxford ...

wrote: “All

knowledge Knowledge is an Declarative knowledge, awareness of facts, a Knowledge by acquaintance, familiarity with individuals and situations, or a Procedural knowledge, practical skill. Knowledge of facts, also called propositional knowledge, is oft ...

is of itself of some value.” In the 19th century, Coleridge (1825) stated that : “The worth and value of knowledge is in proportion to the worth and value of its object.” Auerbach (1865) asked: “What is all our knowledge worth?" although he proposed no answer. Largely the same ideas are already expressed in the term ''

intellectual capital Intellectual capital is the result of mental processes that form a set of intangible objects that can be used in economic activity and bring income to its owner (organization), covering the competencies of its people (human capital), the value relat ...

'' or the more ancient ''

knowledge is power The phrase "" (or "" or also "") is a Latin aphorism meaning "knowledge is power", commonly attributed to Sir Francis Bacon. The expression "" ('knowledge itself is power') occurs in Bacon's ''Meditationes Sacrae'' (1597). The exact phrase "" ( ...

'' - given that power is a value in its own right. Only towards of the end of the 20th century, however, was the value of knowledge in a business context generally recognized. The idea has since become something of a

management fad Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or a government bodies through business administration, nonprofit management, or the political science sub-field of public administr ...

, although many authors indicate that the underlying principles will become standard business practice. It is now understood that knowledge about how to produce products and provide services as well as their embedded knowledge is often more valuable than the products and services themselves or the materials they contain. Although measuring the value of knowledge remains elusive, describing its flow through value chains is a step in the right direction. Firestone was the first to relate knowledge to business when he noted that “Thought, not

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are: m ...

is the real business capital.” Alvin Toffler (1990) proposed that knowledge is a wealth and force multiplier, in that it augments what is available or reduces the amount needed to achieve a given purpose. In comparing knowledge and product value, Amidon (1997)Amidon, Debra M. 1997.

Innovation Innovation is the practical implementation of ideas that result in the introduction of new goods or service (economics), services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a n ...

Strategy for the

Knowledge Economy The knowledge economy, or knowledge-based economy, is an economic system in which the production of goods and services is based principally on knowledge-intensive activities that contribute to advancement in technical and scientific innovation. ...

. Butterworth-Heinemann, Boston, MA. p7, 82 observes that knowledge about how to produce products may be more valuable than the products themselves. Leonard similarly points out that products are physical manifestations of knowledge and that their worth depends largely on the value of the embedded knowledge. Davis (1999) further notes that the computer chips in a high-end automobile are worth more than the steel, plastics, glass, or rubber. However, Davis and Botin (1994)Davis, Stanley M. and Jim W. Botkin. 1994. The Coming of Knowledge-Based Business. In: Harvard Business Review (Sept. 1994) indicate that awareness of the value of knowledge exceeds the ability of many businesses to extract it from the goods and services in which it is embedded. Measuring the value of knowledge has not progressed much beyond an awareness that traditional accounting practices are misleading and can lead to wrong business decisions (Martin, 1996). Amidon (1997) points out that the shift from tangible to

intangible asset An intangible asset is an asset that lacks physical substance. Examples are patents, copyright, exclusive franchises, Goodwill (accounting), goodwill, trademarks, and trade names, reputation, Research and development, R&D, Procedural knowledge, ...

s will revolutionize the way that enterprises are measured and that there is an entirely new way to value economic wealth. Simard et al. (2007) developed a content value chain describing the flow of content through a sequence of stages in which its form is changed and its value or utility to users are notably increased at each stage: objects, data, information, knowledge, and wisdom. They also developed a knowledge services value chain, which describes the flow of knowledge services through a sequence of stages, in which value is embedded, advanced, or extracted. The stages are: generate, transform, manage, use internally, transfer, add value, use professionally, use personally, and evaluate.

References

*Martin, James. 1996. CYBERCORP, The New Business Revolution. American Management Assoc. New York. p22 *Simard, Albert. 2004. Knowledge Management: A Value-Chain Approach, pres. to: Interdepartmental Knowledge Management Forum, Ottawa, ON

{{DEFAULTSORT:Knowledge Value Knowledge management Business terms

See also

References