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Technology innovation and knowledge management in the high-tech

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Article in International Journal of Technology Management · January 2007

DOI: 10.1504/IJTM.2007.013437

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Int. J. Technology Management, Vol. 39, Nos. 1/2, 2007 3

Technology innovation and knowledge management

in the high-tech industry

Iuan-Yuan Lu* and Chun-Hsien Wang

Institute of Business Management,
National Sun Yat-sen University,
Kaohsiung 804, Taiwan, ROC
E-mail: [email protected]
E-mail: [email protected]
*Corresponding author

Chih-Jen Mao
Department of Business Administration,
Fortune Institute of Technology,
Kaohsiung 831, Taiwan, ROC

Institute of Business Management,

National Sun Yat-sen University,
Kaohsiung 804, Taiwan, ROC
E-mail: [email protected]

Abstract: This study presents a comprehensive and integrated discussion of the

various facets of technology innovation and Knowledge Management (KM) for
high-tech firms. KM represents a key contemporary trend and is a key
management discipline in decision making, strategy development, information
systems and technology management. KM provides a broad perspective, an
efficient method of problem-solving, sharing managerial knowledge and
leveraging technological knowledge. This work focuses mainly on influences
that might shape the future of knowledge-based technological innovation in the
knowledge economy, particularly, the influence of knowledge activities.
Accordingly, it is important to provide some brief perspectives on the
development of technological innovation and KM.

Keywords: Knowledge Management (KM); technology innovation; high

technology firms.

Reference to this paper should be made as follows: Lu, I-Y., Wang, C-H. and
Mao, C-J. (2007) ‘Technology innovation and knowledge management
in the high-tech industry’, Int. J. Technology Management, Vol. 39, Nos. 1/2,
pp.3–19.

Biographical notes: Iuan-Yuan Lu is a Professor in the Institute of Business

Management, National Sun Yat-sen University, Taiwan. He received a PhD in
Administration Engineering in 1978 from Keio University, Japan. He is the
President of the Chinese Society for Quality, the Board of Directors of China
Steel Crop, the Board of Committee of the Fortune Institute of Technology, the
Board of Committee of the Electronics Testing Center (ETC), the Board of
Directors of Chinese Institute of Industrial Engineering, the Board of Directors
of Chinese Management of Technology Society, the Member of Board of the

Copyright © 2007 Inderscience Enterprises Ltd.

4 I-Y. Lu, C-H. Wang and C-J. Mao

Asian Network for Quality, the Publisher of the Journal of Quality and Quality
Magazine. His current research interests include industrial engineering and
management, technology management, technology innovation, technology
policy, R&D management, TQM, product development and production
management, SCM, fuzzy evaluation and decision making.

Chun-Hsien Wang is a PhD candidate at the Institute of Business Management,

National Sun Yat-sen University. He has published several papers in referred
journals and conference proceedings. His current research interests include
quality management, information management, technological innovation
and knowledge management, high technology management and fuzzy
decision-making theory.

Chih-Jen Mao is a Lecturer in the Department of Business Administration of

the Fortune Institute of Technology and a PhD candidate in the Institute of
Business Management of National Sun Yat-sen University. His current research
interests include knowledge management and technology management.

1 Introduction

The 21st century is the era of high technology and the knowledge economy, and
technology innovation and Knowledge Management (KM) have become an increasingly
important source of added value for businesses. Technological innovation and KM have
also become increasingly problematic, and in particular firms depend on continual
technological innovation based on the knowledge-based view and managerial response to
changing environments to maintain competitiveness during competitive edge to facilitate
imitation and reduce product life cycle. Technological innovation is a highly complex
organisational activity and to date no widely accepted management method has been
designed for managing knowledge of technological innovation. Numerous methods exist,
the advantages and disadvantages of which vary according to how they are used.
Consequently, KM activities can be used to improve the cycle of knowledge creation,
capture, organisation, filtering and sharing to increase innovation success rate and
improve organisation performance.
The complex technology innovation activities are emerging as an important issue,
and include problems such as how best to manage knowledge-based technology
innovation activities, and how an organisation should utilise knowledge-based
technology innovation to improve organisation processes and core competence. This
Special Issue of the International Journal of Technology Management, dealing with
‘Technology innovation and Knowledge Management for high-tech industry’, focuses on
integrating organisation technology innovation activities with KM in relation to
innovation process.
Knowledge-based technology innovation has numerous benefits. Firstly, knowledge-
based technological innovation reduces the risks associated with research and
development. Secondly, knowledge-based technology innovation has the benefit of
avoiding the duplication of research and development costs, and allows firms to gain by
sharing technological know-how. Finally, when firm competitive advantage is based on
technological competence in a wholly owned knowledge-based technology, the risk of
losing control over that competence is generally reduced.
 Technology innovation and KM in the high-tech industry 5

2 Nature of KM

2.1 Knowledge classification

Before examining how improved KM can enhance innovation, it is important to define
knowledge and how to exercise KM. Davenport and Prusak (1998) defined knowledge as
“a fluid mix of framed experience, values, contextual information, and expert
insight that provides a framework for assessing and incorporating new experiences
and information”. The classification of knowledge facilitates the understanding of
KM scholars have developed different classifications. Besides general knowledge
for example product knowledge, process knowledge and customer knowledge, this
work identifies two categories of knowledge as being especially important in
relation to management, that is tacit/explicit knowledge and individual/collective
knowledge.

2.2 Tacit knowledge versus explicit knowledge

Polanyi demonstrated that ‘we can know more than we can tell’ and pointed out the
tacit dimension of knowledge (Polanyi, 1997). Moreover, Nonaka identified two
different types of knowledge: tacit and explicit (Nonaka, 1991). Tacit knowledge is
difficult to formalise and communicate. Tacit knowledge has both technical and
cognitive dimensions (Nonaka, 1991, 1994). The technical dimension consists of
skills, crafts, and know-how, while the cognitive dimension consists of mental
models, beliefs and perspectives. The tacit dimension of knowledge has major
implications for understanding the difficulty of expressing and transferring individual
knowledge and skills (Kogut and Zander, 1992). Compared to tacit knowledge,
explicit knowledge is formal and systematic, and is easily communicated and diffused
(Nonaka, 1991).
The implication for the explicit knowledge is how an organisation can manage two
kinds of knowledge. For tacit knowledge, the key to KM lies in how to share and
externalise (Skyrme, 2000). Individuals can share tacit knowledge with other persons by
socialising process (Nonaka, 1994). The process of experience sharing is also an
individual knowledge creation process. Using a mentor system or On-the-Jog Training
(OJT), individuals can learn tacit knowledge and skills from colleagues through
observation, imitation and practice. However, organisations wishing to leverage tacit
knowledge must first codify or externalise that tacit knowledge. Metaphor, analogy
and models enable individuals to try to convert tacit knowledge into explicit
knowledge (Nonaka, 1991). Meanwhile, explicit knowledge is easily articulated or
codified and thus its management involves knowledge storage, dissemination, retrieval,
use and protection.
From this tacit/explicit perspective, organisations can apply codification or
personalisation strategies for KM (Hansen et al., 1999). The codification strategy
involves knowledge codification, storage and reuse. Organisations manage the
knowledge repository and help employees to search and use knowledge. Meanwhile,
personalisation strategies focus on dialogue among individuals. Establishing
employee networks facilitates tacit knowledge transfer. Knowledge can be shared
face-to-face, over the telephone and via e-mail or videoconferences.
6 I-Y. Lu, C-H. Wang and C-J. Mao

2.3 Individual knowledge versus collective knowledge

Knowledge can also be classified into individual and collective knowledge. Probst et al.
demonstrated that organisation knowledge base comprises individual skills and collective
knowledge (Probst et al., 2000). Individuals possess technical skills, experience, talent
and intuition. A significant proportion of an organisation’s knowledge is embedded in its
employees. However, organisation success also depends on effectively and efficiently
combining different employees. Three types of skills and knowledge are embodied
in employees:
1 public or scientific knowledge
2 industry-specific knowledge and
3 firm-specific knowledge (Leonard, 1995).
Firm-specific knowledge is more difficult to articulate than the other knowledge types.
Individual knowledge is a knowledge-storing medium. However, once an employee
leaves, whether through dismissal, retirement or death, the organisation loses their
knowledge permanently. Consequently, the most important thing is to transform
individual knowledge into documents or collective knowledge. Obstacles to such
transformation include willingness of share and, establishing a culture of sharing
facilitates knowledge transfer. Meanwhile, groups can store shared experience.
Organisations should create a common employee language and mechanism for
experience sharing, for example a Community of Practice (CoP).

2.4 Process viewpoint versus blocks viewpoint for KM

KM can be viewed from two perspectives: a process or building blocks. Grover and
Davenport (2001) showed that knowledge processes consist of three subprocesses:
knowledge generation, knowledge codification and knowledge transfer/realisation.
Exploiting the value chain of Porter, Lee and Yang established a knowledge value chain
model and viewed KM as a process (Lee and Yang, 2000). Besides the KM process,
knowledge value chain comprises KM infrastructure and knowledge performance. The
process of knowledge value chain comprises five activities: knowledge acquisition,
knowledge innovation, knowledge protection, knowledge integration and knowledge
dissemination.
Probst et al. (2000) identified six activities as the building blocks of KM: knowledge
identification, knowledge acquisition, knowledge development, knowledge
sharing/distribution, knowledge utilisation and knowledge retention. These activities are
knowledge-related and interactive. From the perspective of social collectives and
knowledge system, Alavi and Leidner (2001) designed a systematic framework
comprising four knowledge processes: creation, storage/retrieval, transfer and
application. These four processes are also demonstrated in a separate and non-linear
sequence. On the basis of the works of previous scholars as well as previous research,
this study designs an integrated KM framework.

2.5 KM framework
The KM framework comprises three parts: KM core process, KM Infrastructure and KM
performance evaluation. The KM core process consists of six KM activities, namely,
 Technology innovation and KM in the high-tech industry 7

knowledge identification, acquisition, creation, dissemination, utilisation and retention.

These six KM activities combine the building block perspective and are not individual
elements but rather interact with one another is the basis of KM and comprises
management infrastructure, Human Resource (HR) infrastructure and Information
Technology (IT) infrastructure. Each infrastructure facilitates the core process and KM
activities. Finally, the KM performance evaluation indicates the assessment of KM
implements (Figure 1).

Figure 1 The knowledge management framework

Source: Adapted from Lee and Yang (2000) and Probst et al. (2000).

2.5.1 Knowledge identification

The first activity involved in the KM process is that organisations should identify the
knowledge they own themselves, namely the core knowledge of competitive advantage
and knowledge gaps. Knowledge audit is a good method of identifying organisation
knowledge base. However, benchmarking helps companies to identify external
knowledge. Directories of experts or yellow pages offer an effective method of locating
specialists and experts within the firm. Other tools, for example knowledge maps,
knowledge topographies, maps of knowledge assets, geographical information systems,
knowledge source maps, knowledge matrices and intranet, can all facilitate knowledge
identification (Probst et al., 2000). Besides formal organisations, informal networks are
also important in KM. Krackhardt and Hanson (1993) believed that organisations consist
of three kinds of informal networks: advice networks, trust networks and communication
8 I-Y. Lu, C-H. Wang and C-J. Mao

networks. Firms can use network analysis to map three types of relationship networks,
and such networks provide good KM tools. Strategy formulation and competition
analysis enables companies to confirm their core knowledge and gaps in that knowledge.
Probst et al. (2000) demonstrated two gaps in the knowledge of firms. Organisations can
apply knowledge acquisition to close knowledge gaps in situations where firms do not
possess existing knowledge. Furthermore, organisations must create or develop
knowledge that does not yet exist by themselves.

2.5.2 Knowledge acquisition

External knowledge sources are crucial to firm innovation (Cohen and Levinthal, 1990).
Organisations must avoid the ‘Not Invented Here’ (NIH) syndrome. Even organisations
in totally different industries can have fruitful sources of ideas and catalysts for
innovation (Garvin, 1993). Companies can obtain knowledge on the external knowledge
market, for example external experts, other firms, stakeholders and knowledge products
(Probst et al., 2000). From the perspective of individual knowledge, companies can
recruit employees on long-term commitments, or hire external experts and use their
expertise for a short time. Mergers and acquisitions, joint ventures and strategic alliance
provide companies with methods for cooperating and accessing the organisational
knowledge of other companies. Imitation or licensing agreements provide some ways for
firms to learn from other firms. Licensing intellectual capitals enables licensees to adopt
three strategies: leveraging complementary assets, enhancing product lines and
competitive hedging (Torres, 1999).

2.5.3 Knowledge creation

Nonaka (1991, 1994) thought that knowledge is created transforming tacit into explicit
knowledge. Four modes of knowledge creation exist in organisations.
1 From tacit knowledge to tacit knowledge. Tacit knowledge is created via
socialisation.
2 From tacit knowledge to explicit knowledge. Explicit knowledge is created via
externalisation.
3 From explicit knowledge to explicit knowledge. Explicit knowledge is created
via combination.
4 From explicit knowledge to tacit knowledge. Tacit knowledge is created via
internalisation.
Nonaka (1994) demonstrated organisational knowledge creation using the spiral model
of knowledge creation. The cycle is shaped via the sequence of the externalisation,
combination and internalisation processes. The ‘spiral’ begins at the individual level and
rises through the group, organisation and inter-organisation levels. Knowledge creation
occurs through associating employee uniqueness with a set of activities. Drawing
on extensive field studies, Leonard identified four learning activities that were involved
in knowledge creation:
1 shared problem solving
2 implementing and integrating new technical processes and tools
 Technology innovation and KM in the high-tech industry 9

3 experimenting and prototyping and

4 importing and absorbing technological knowledge from outside the firm
(Leonard, 1995).

2.5.4 Knowledge dissemination

Knowledge transfer is one of the main areas of KM. Demonstrating the process of
knowledge sharing and transfer, it is necessary to require understanding knowledge
markets and the impediments to the internal transfer of knowledge (Davenport and
Prusak, 1998; Szulanski, 1996). The main frame of KM is to create an efficient and
effective knowledge marketplace within the organisation (Davenport and Prusak, 1998;
Grover and Davenport, 2001). Knowledge centres can serve as hubs for knowledge
diffusion, linking individual searching for knowledge to appropriate persons or
knowledge repositories (Skyrme, 2000). Davenport and Prusak (1998) posited that
knowledge transfer involves two actions: transmission (sending knowledge to a potential
recipient) and absorption by the recipient. Hendriks (1999) submitted a model of
knowledge-sharing process, which comprises two subprocesses. Firstly, knowledge
owners perform ‘externalisation’ sub-process. Secondly, the ‘internalisation’ subprocess
is performed by those seeking knowledge that is knowledge reconstructions. Szuslanski
(1996) proposed that the practice transfer process comprises four stages: initiation,
implementation, ramp-up and integration.
Garvin (1993) listed various mechanisms for stimulating knowledge transfer:
reports (including written, oral and visual), site visits and tours, personnel rotation,
education and training courses and standardisation programmes. ‘CoP’ is an excellent
knowledge-sharing mechanism. The organic, spontaneous and informal character of CoP
enables them to easily solve problems, transfer best practice, develop employee skills and
retain talent. Wenger and Snyder (2000) CoP are virtually connected with periodic
face-to-face meetings. These networks transcend organisational boundaries and facilitate
knowledge dissemination. Best practice is one of the most important forms of collective
knowledge. O’Dell and Vestal (2003) demonstrated two forms of best practice transfer:
Push and Pull. “The push method involves the organization capturing a best practice that
can benefit every location or division within the organization. Meanwhile, the pull
method involves a location or division realizing that they have a weakness and then
seeking a solution”. Top management plays an active role in the push method of
knowledge dissemination, but simply lets the dissemination process continue undisturbed
in the pull method.
Research on transfer of best practice suggests that four categories of factors possibly
influence knowledge transfer, namely, knowledge characteristics ambiguity regarding
causes, unproven knowledge, source characteristics (lack of motivation or credibility),
recipient characteristics (lack of motivation, absorptive capacity, or retentive capacity)
and context characteristics (barren organisational context, arduous relationship). The
main impediments to internal knowledge transfer were factors such as causal ambiguity,
recipient lack of absorptive capacity and an arduous relationship between the source and
the recipient (Szulanski, 1996). Recipient failure to absorb the knowledge indicates
incomplete knowledge transfer (Davenport and Prusak, 1998). Individual absorptive
capacity is based on previous possession of associated with prior knowledge permit
individuals to understand and capture new knowledge (Bower and Hilgard, 1981; Cohen
and Levinthal, 1990).
10 I-Y. Lu, C-H. Wang and C-J. Mao

2.5.5 Knowledge utilisation

Regarding knowledge utilisation, organisations should confirm that knowledge is used
efficiently and effectively, and is not misused or abused. Psychological impediments to
using new knowledge result from overconfidence or fear of losing one’s specialist
position (Probst et al., 2000). Organisations, thus, should establish a culture of
encouraging knowledge by employees. User-friendly information systems are necessary
for knowledge utilisation. A user-friendly system requires simplicity, good timing and
compatibility (Probst et al., 2000). Excellent search engines can search rapidly based on
keywords and facilitate knowledge retrieval. Numerous firms have developed valuable
intellectual capital, yet have not accurately valued them and thus fail to exploit them;
meanwhile, such firms always waste resources on developing intellectual capital, which
they already own (Davenport et al., 2003; Torres, 1999). Consequently, commercialising
or reusing intellectual capital is an important component of KM. Firms, which develop
valuable intellectual capital that they cannot commercialise can license this capital to
other firms. Licensing intellectual capital indicates one of three strategic perspectives:
strategic positioning, lateral revenue and minimising risk (Torres, 1999).

2.5.6 Knowledge retention

Numerous scholars have discussed ‘organisational memory’ (Probst et al., 2000; Walsh
and Ungson, 1991). Knowledge preservation is important because the ability to exploit
external knowledge is a function of prior related knowledge (Cohen and Levinthal,
1990). Knowledge can be stored on individuals, groups and computers. Intranet
databases are a common form of organisational memory, but much organisational
memory is embedded in procedures, business process and the brains of employees
(Probst et al., 2000; Skyrme, 2000). Knowledge protection is another important issue in
knowledge retention because it protects the interests of the firm (Lee and Yang, 2000).
Organisations should take appropriate legal action against Intellectual Property
Rights (IPR) violations. Furthermore, a sophisticated information system with an
authority design can also protect against knowledge abuse and leakage.

2.5.7 Management infrastructure

Successful KM requires support from top management. Unlike typical ‘top-down’ or
‘bottom-up’ management, Nonaka (1994) proposed the ‘middle-up-down’ management
model. This model emphasises the role of top and middle management in KM. The top
management plays the role of catalysts, sets organisational intention, clears barriers and
prepares the ground for a self-organising team guided by middle management. The KM
strategy must be consistent with general firm strategy. Furthermore, organisations should
promote learning and a shared culture to facilitate organisational learning and knowledge
transfer.

2.6 HR infrastructure
People are the main carriers of knowledge, so organisations should focus on the retention
of employees, incorporate employee expertise into firm routines via learning procedures,
and introduce mechanisms for the distribution of interests arising from the utilisation of
 Technology innovation and KM in the high-tech industry 11

this expertise (Currie and Kerrin, 2003; Scarbrough and Carter, 2000). From the
perspective of HR management, recruiting outstanding knowledge workers, providing
education and training, building organisational learning and setting reward systems are
crucial for KM. For knowledge transfer, employee willingness to share knowledge with
others is crucial to KM. Encouraging a knowledge-sharing culture and settling
knowledge-sharing events brings people together that facilitates success in arranging
knowledge-sharing events which in turn facilitates successful knowledge dissemination
(Skyrme, 2000).

2.6.1 IT infrastructure
Some see investment in KM systems as critical for successful KM. However, the truth is
that effective firm’s excel by focusing on person and using IT in a supportive role.
A perfect system is useless if employees are unwilling to use it. Trying to implement KM
without IT is extremely challenging but IT of itself does not guarantee the success
of KM.
IT can facilitate all activities related to the core KM process. Intranets, groupware
and communication are platform technologies of KM. Data mining can be used to create
knowledge; expert systems facilitate: knowledge distribution and application;
videoconference and grapevine systems permit simultaneous knowledge sharing, use and
creation. When used as knowledge repositories, databases can store immense knowledge
and support individual and organisational memory (Alavi and Leinder, 2001; Probst
et al., 2000).

2.7 KM performance evaluation

Arthur Andersen and the American Productivity and Quality Centre (APQC) developed a
Knowledge Management Assessment Tool (KMAT) for analysing KM effectiveness.
The tool consisted of five parts: KM process, KM leadership, KM culture, KM
technology, and KM measurement (KMAT). Several measurement systems exist besides
KMAT, including Balanced Scorecard (BSC), SKANDIA’s Navigator, CELEMI’s
Intangible Assets Monitor and Multidimensional knowledge measurement system, all of
which are useful in evaluating KM performance (Probst et al., 2000).

3 Technological innovation

Innovation is an elusive concept. Numerous key issues require consideration. The

seminal study on entrepreneurship and economic development by Schumpeter (1939)
defined innovation as the establishment of a new production function. Early definitions
of innovation were based primarily on how to transfer innovation capabilities to improve
production. Various perspectives have recently been applied to analyse the concept of
innovation. Thwaites and Wynarczyk (1996) defined innovation as a significant technical
advance within a given industrial context. Moreover, Tidd et al. (2001), defined
innovation consists of two dimensions, namely, change and degree. The first dimension
is particularly on technological change. The technological change can take two forms:
changes in the product/services, which an organisation offers, and changes in the way
12 I-Y. Lu, C-H. Wang and C-J. Mao

these products are created and delivered. Second dimension of change is the degree of
novelty involved. There are various degrees of novelty, running from minor, incremental
improvements right through to radical changes, which transform attitudes towards and
ways of using.
Rogers (1995) uses the words ‘innovation’ and ‘technology’ synonymously. Rogers
conceives technologies as designs for instrumental action that reduce uncertainty in the
cause–effect relationships involved in achieving a desired outcome. Technologies
generally consist of two components – a hardware aspect, consisting of the tool that is
the material embodiment of the technology and a software aspect, comprising the
information base required to use the tool. Panda and Ramanathan (1996) defined
technological capabilities as a set of functional abilities, reflected in firm performance via
various technological activities and whose ultimate purpose is firm-level value
management via developing difficult-to-copy organisational abilities. Rothwell (1977)
noted that technological innovation is a complex technical/social/economic process
involving an intricate web of interactions, both within and between the firm and its
external environment. Innovation studies demonstrate the pluralistic nature of the
numerous dimensions underlying innovation. Consequently, technological innovation
must be prescriptive, and should preferably lead to the identification of various
management strategies. Recently, Burgelman et al. (2004) further defined Technological
Innovation Capabilities (TICs) as a comprehensive set of organisational characteristics
that facilitates and support the technological innovation strategies of an organisation.
Moreover, Yam et al. (2004) also argued that successful technological innovation
depends not only on technological capability, but also on other critical capabilities in
manufacturing, marketing, organisation, strategy planning, learning and resource
allocation. Consequently, a deep understanding of technological innovation
management processes could help improve firm practices. On the one hand, such
analysis helps provide useful information to management regarding present and
desired levels of TICs, something crucial to achieving and sustaining competitive
advantage.

4 KM and technology innovation

Technological know-how constitutes the competitive advantage of many high-tech firms.

Most firms wish to maintain control over how their know-how is used, and firms can
efficiently control and manage their technology via an excellent KM system.
Particularly, high-tech firms are more knowledgeable regarding new technologies and
recognise more innovation opportunities (Pavitt, 1984). Thus, information processing
efficiency for individual firms can be effectively promoted, and technology and
knowledge can then accumulate as part of firm core competence (Hamel and Prahalad,
1994). Studies, Pavitt (1984) and Hamel and Prahalad (1994), provide a particularly
useful bridge from KM activities to technological innovation–competitive advantage
relationships, as shown in Figure 2. The first level of the bridge is KM activities and
KM cycle. Organisations may embody different knowledge and technologies in
different organisation processes or sectors, and furthermore organisations must integrate
this knowledge and technology into innovation activities to specialise their innovation
efforts.
 Technology innovation and KM in the high-tech industry 13

Figure 2 Hierarchy of KM and TI

The KM cycle splits into five separate activities: knowledge acquisition to knowledge
creation, knowledge creation to knowledge diffusion, knowledge diffusion to knowledge
utilisation, knowledge utilisation to knowledge storage, knowledge storage to next
stage knowledge cycle, with each step coping with a particular aspect. Acquisition of
knowledge means that knowledge-based technology yield can be derived by an
organisation internally or externally. Creation involves the internalisation of knowledge-
based technology via collaboration with organisation employees or outside professionals
and then effectively applying existing knowledge to create new knowledge. Diffusion
creates the potential for knowledge-based technology to diffuse out of the department
and into general business processes, and thus can enhance firm operating efficiency and
performance. Utilisation involves maximising the utilisation of the new knowledge
environment for learning from different specialised forms of knowledge and maximising
the value thus obtained. Storage involves setting/embodying knowledge-based
technology to articulate and codify in the report and business process in the organisation
databases; thus, enabling them to be easily accessed and used by organisation
members. Reusing knowledge saves work, reduces communication costs and increases
cost-effectiveness.
Examining the mechanisms of KM enables the shaping and diffusing of
knowledge-based technological activities within the firm, and may result in different
types of innovation activities for promoting innovation behaviour and improving
innovation performance. The next level is knowledge-based technological innovation, in
which the organisation faction is employed to competently and reliably perform
innovation tasks. Innovations provide the critical component of firm competitive
strategy. Most knowledge-based technological innovation is difficult to codify, store and
transfer, and thus technological innovation can be considered as tacit knowledge.
Knowledge-based technological innovation can only be observed through application,
acquired, practice and experience and consequently is difficult to transfer. Consequently,
KM systems can be codified in the form of formulas, designs and reports, further
14 I-Y. Lu, C-H. Wang and C-J. Mao

improving efficiency, ease of transfer and storage, and facilitating the sharing of tacit
knowledge related to technical skills. Again, knowledge-based technologies contribute
significantly to firm innovation capability and become a part of firm core competence.
A third level is competitive advantage: competitive advantage results from OR is based
on the knowledge-based technological innovation available via organisation KM
activities and creative processes. Competitive advantage is difficult to imitate, and
become integral to firm core competence. Three processes that create core competence
can derive from organisational individual creation and collective efforts, which can
be returned to the KM system and stored in the form of new knowledge. These steps
create core competence of knowledge-based technological; additionally, tacit knowledge
is created and maintained over a period of time and high-tech firm practice. This Special
Issue of the International Journal of Technology Management is distinguished by
focusing on integrated technological innovation and organisational KM.

5 Overview of papers

This Special Issue presents eleven papers. All of these papers deal with complex
technological innovation activities such as R&D and KM from the perspective of the
actual marketplace behaviour of firms/organisations.
The first paper was Hännines’ (submitted for publication) ‘The ‘Perfect Technology
Syndrome’: sources, consequences, and solutions’. He proposed that four kinds of
knowledge-based innovation syndromes were embodied in existing organisations,
namely: technological knowledge base, end-user knowledge base, brand knowledge base
and business-logic knowledge base. Technological knowledge involves the technological
development process, which involves innovation adoption activities. End-user
knowledge is a form of problem-solving, which uses innovation methods. Moreover,
brand knowledge involves firm brand equity, products and technological-added value for
innovation activities. Furthermore, business-logic knowledge describes the position and
function of an innovation in relation to firm business operations. These approaches are
cross-functional cooperation in technology-intensive firms. Additionally, besides
deploying the above-mentioned four knowledge bases, he also points out the need to
align these bases with complementary resources, key technological development partners
and develop innovative technological products for specific target groups.
The second paper by Motohashi (submitted for publication) ‘The changing autarky
pharmaceutical R&D process: causes and consequences of growing R&D collaboration
in Japanese firms’, analysed the causes and consequences of the recent increase in
external R&D collaboration among Japanese pharmaceutical firms. He found that large
Japanese pharmaceutical firms engaged in R&D collaboration in which technology
opportunity factor, market condition factor and innovation policy factor. From his
findings, relation factors can be induced from the above-mentioned three aspects. The
technology opportunity factor concerns the qualitative nature of new technologies for
drug R&D, the adequacy of in-house HRs for efficiently establishing external
partnerships and the implementation of more efficient scientific methods and abundant
knowledge, to discovering and screening for new drug R&D. The market condition
factors include steady expansion of the domestic market, share of foreign-affiliated
pharmaceutical firms R&D knowledge, medical system reforms, revisions of regulatory
standards and international alliances. Finally, the innovation policy factor considered the
 Technology innovation and KM in the high-tech industry 15

role of public research organisations such as universities and government

research centres, for example, the government provides encouragement and support via
public policy.
The third paper was Maine and Garnsey (submitted for publication) and
demonstrated that, the commercialisation process involves high uncertainty and requires
the inspection of numerous occasions and elements. Particularly, advanced materials
firms face high technical combined with high market risk, and thus must better
understand the commercial environment in order to adopt an advanced management
approach and strategy for recognising emerging opportunities and adopting appropriate
decisions. The authors applied an open system’s model to recognise advanced materials’
commercialisation environment according to materials venture technological
capabilities and other complementary assets. From a scientific perspective, advanced
materials venture can be conducted through cooperation with universities, government
research labs and R&D labs of established firms to access R&D knowledge needs. From
the perspective of investors, advanced materials ventures must attract substantial capital
investment to ensure long-term technological and market development. The perspective
of co-producers/distributors that advanced materials ventures can use alliances with large
firms to acquire or access complementary assets for commercialising their innovations.
Finally, to find potential customers’ advanced materials ventures must identify market
applications in which both the overall market size and the potential returns are
sufficiently large to attract external investment.
The fourth paper, ‘Real options for innovation management’ by Fredberg (submitted
for publication), adopted real options for innovation management via a combination of
real option theory and design theory. He used the logic of real options to guide the
management of innovations such as open possibilities to commercialise new products
rather than using the real option’s mathematical model. The design theory purports to
explain innovation or create new product concepts in the face of uncertainty. Design
theory and real option theory can be combined to clearly define the necessary conditions
for innovation development, and furthermore these conditions can also be evaluated
using option theory during the development of each decision taken on each level.
Therefore, the integration of real option theory with design theory into New Product
Development (NPD) processes work towards divergence by creating possibilities for
future growth and thus enlarging the area of activity.
The fifth paper, “Examining governance-innovation relationship in the high-tech
industries: monitoring, incentive and a fit with strategic posture” by Wu et al. (submitted
for publication) applied fundamental agency theory to study relationship in
innovativeness effects and governance arrangements from Taiwanese firms in the
high-tech industries. Their empirical study found that while firms enhance innovation
efforts through contingency, approach can achieve better and more rapid response and
deal with the managerial risk resulting from a fit of governance arrangement and an
appropriate strategy profile.
The sixth paper, by Su et al. (submitted for publication), examines NPD is an
important innovation and knowledge creation activity. Traditionally NPD focuses on
product knowledge and technology innovation, while customer knowledge is not widely
applied. The authors presented an industrial level case study and proposed an integrated
KM model for managing NPD and customer knowledge. The major contribution of this
paper lies in the combination of product KM and customer KM via the NPD process, and
the involvement of IT in customer KM.
16 I-Y. Lu, C-H. Wang and C-J. Mao

The seventh paper demonstrates that Industry-University (I/U) collaboration is a

good external source of knowledge acquisition. Employing a qualitative in-depth case
study approach, Harryson et al. (submitted for publication) observed how the firm Bang
& Olufsen secures knowledge transfer from exploration to exploitation and proposed a
fundamental theoretical framework. The authors stressed the difficulty faced by a
company in performing both exploration and exploitation within the organisation. Bang
& Olufsen spun off Bang & Olufsen ICEPower as a node interlinking academic
exploration and industrial exploitation to improve their adoption and adaptation of
academic knowledge. The contribution of this paper lies in providing a new perspective
for future I/U collaborations.
As a performance measure or a strategic management system, the BSC, which
includes financial measures, customers, internal business processes and measures of
learning and growth, is proposed by Kaplan and Norton (1992, 1996). Lee and
Lai (submitted for publication) applied BSC framework to examine KM practice in the
high-tech industry. The authors proposed three hypotheses and applied quantitative
methods, for example principal components analysis, to examine these hypotheses. The
main finding was that top managers and KM managers of high-tech companies weight
non-financial measures higher than financial measures as measures of KM performance.
University laboratories are one important source of new knowledge, and sustaining
creativity specifically at such laboratories is the focus of the ninth paper. Tai and
Lee (submitted for publication) analyse and compare UK and Taiwanese universities’
laboratories and find three crucial factors are main creating of new knowledge, namely:
maintaining an excellent traditional culture and academic system, sustaining learning and
management as critical research fields and researcher selection and education.
Finally, two papers on KM practice are introduced. These two papers deal with
different kinds of organisations, namely profit and non-profit organisations. Yuan and
Wang (submitted for publication) demonstrated two cases of KM implementation
processes by analysing secondary data that is log files, of profit and non-profit
organisations over the past 15 years. The Industrial Technology Intelligence Service
(ITIS) Programme, supported by the Ministry of Economic Affairs (MOEA) of the ROC,
is a service programme providing industrial information to companies. The Industrial
Technology Research Institute (ITRI) is the largest government-sponsored research
institute in Taiwan. These two knowledge-intensive organisations have their own distinct
character and use different implementation processes and methodologies.
Advanced Semiconductor Engineering (ASE), the largest semiconductor packaging
and testing company in the world, has implemented KM since 2000. Yeh and Chou
(submitted for publication) referred to the double-loop KM model and the bottom-up
implementation process adopted in ASE to study KM activities of semiconductor
packaging and testing firms. In the bottom-up implementation process, how to convince
senior executives of the importance of KM and acquire their support is a crucial problem.
The contribution of this paper is that the experience of ASE provides a good example of
KM, particularly initiated from the bottom of the organisation.

6 Conclusion

The papers presented in this Special Issue provide extensive bibliographies on

technological innovation activities in KM and different KM applications. By focusing on
 Technology innovation and KM in the high-tech industry 17

knowledge-based technological innovation activities, the authors of these papers not only
provide a starting point for technology management researchers and practitioners, but
also provide a link between technological innovation and KM. We also hope that this
Special Issue can further increase the interest of researchers and practitioners in the role
of technological innovation in KM and the applications of KM.

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