Malaysian Knowledge Management and Innovation

Nations seek to develop new ways of competing on the market. As the world economy sputters along the race for development continues at a renewed pace. The Internet has afforded new ways of using information and those industries and nations that can capitalize on knowledge acquisition the most are likely to see growth in their revenue and subsequent GNP. 

Malaysia has increased in financial and social prominence throughout Southeast Asia. Many of the organizations have capitalized on the new knowledge based technologies to create international competitiveness and improve on national output (Özçelik & Taymaz, 2002). They were able to find methods of gaining, sharing, and implementing such knowledge. 

Yet such gaining, sharing and implementing is not a onetime event. Effective innovation requires a cultural change that creates sustained momentum (Davenport and Prusak, 1998). People should become accustomed through their daily routines to this sharing and developing new knowledge. 

Effective application of innovation requires the ability to put to strong use what is learned. Accordingly, knowledge gaining, knowledge sharing, and application are key components (Zheng, 2005). Such processes of learning, sharing, and implementation should be as efficient and effective as possible. 

Capitalizing on knowledge networks requires the ability to effectively tie new information together in new ways to solve problems. Gaining knowledge alone is not enough. It must be analyzed and connected to other knowledge create and effective solution. Organizations that are more able to effectively capitalize on this connecting of information have significant competitive advantages. 

Research by Tan and Mohd (2010) help to highlight innovative knowledge sharing in Malaysia. A total of 674 large manufacturing firms were found in the Malaysian states of Selangor, Pulau Pinang,

Johor, Kedah, Kuala Lumpur, and Perak for possible testing. Of these potential contributors a total of 171 usable survey responses were returned for analysis. The purpose of the study was to study the influence of knowledge management effectiveness on aspects of administrative and technology innovation.

Results:

-Knowledge management has a significant impact on firm innovation. When firms are able to share and manage knowledge both internally among agents and externally among partners they are able to link information for potential solutions.

-Knowledge gained should be put into training programs for employees and then applied to the workplace.

-Pathways should be developed that allow for transference of knowledge from company to employee, employee to employee, and employee to company.

-Companies should help to encourage employee problem solving abilities.

-With effective knowledge management firms will better be able to capitalize on technology and administrative innovations.

Analysis: 

Organizations that seek to develop stronger innovation networks to capitalize on both administrative and technological advantages need to first create these proper networks and then the cultural routines to ensure the programs are in proper use. New knowledge is gained through these networks by connecting information together in unique ways to solve problems and develop more effective solutions. Effective development of information sharing networks between organizations can lead to further development of national growth. 

Davenport, T., & Prusak, L. (1998). Working knowledge. How organization manage what they know. Boston, MA: Harvard Business Review School Press.

Tan, C. & Mohd, A. (2010). An empirical study of knowledge management effectiveness and organizational innovation in Malaysia manufacturing firms. Proceedings of the International Conference on Intellectual Capital, Knowledge management & Organizational Learning. 

Özçelik, E., & Taymaz, E. (2002). Does Innovativeness Matter for International Competitiveness in Developing Countries? The Case of Turkish Manufacturing Industries, (ERC Working Papers in Economics 01/07), [online], Ankara, Turkey: Middle East Technical University, Department of Economics, Economic Research Center. http://www.erc.metu.edu.tr/menu/series01/0107.pdf

Zheng, W. (2005). The impact of organizational culture, structure, and strategy on knowledge management effectiveness and organizational effectiveness. Published Doctoral of Philosophy dissertation. University of Minnesota, United States: Faculty of The Graduate School.

Innovative Companies Localized into Regional Hubs

Innovation is becoming a concept that nations hope to foster as their financial situations become more dire. Research in national innovation helps to highlight how the concepts of regional hubs can help further this development by creating hives of innovative knowledge sharing. Companies don’t work within isolation and often share knowledge, people, and ideas throughout a region. Research into the development of the pharmaceutical industry furthers this concept of demographic influence.

Innovation is a necessary component of organizational growth and development. Theoretical and empirical literature helps establish an understanding that innovation responds to consumer demand (Schmookler, 1966). In other words, that as customers have needs they desire to be fulfilled, organizations will often develop products and services to meet those needs. The stronger the feedback loop the more likely such customer to company interaction will lead to new innovative insights.

All innovation requires knowledge. This knowledge comes from past experiences, sharing information, new research, education, market needs, and communication. The knowledge that is derived from market and consumer demand and is often difficult to codify in concise terms that can be applied appropriately (Polanyi, 1966). Without strong analysis and customer research it is difficult to determine what consumers are looking for in order to develop these new products and services.

This difficulty in codifying needs into concise terms means that such understandings often are derived from multiple pathways as a result of local communication. It seeps into the organizations in an amebic fashion. Those firms that operate on a local level have a better understanding of the tacit needs of their customers (Kogut, 1993). It is through constant communication with customers and the local market that such needs and solutions finally become crystallized. 

In innovation there is also a pull and push strategy in much the same manner as there is in marketing. Demand pull from the market helps to shape innovative investments (Schmookler, 1966). As customers create needs, organizations will naturally respond to those needs. Furthermore, there is also technology push that comes from the science, learning, research, knowledge, manufacturing and production. Such inventions create a frontier by which new products and services can create markets (Griliches, 1995).

To see how this push and pull strategy, combined with local knowledge, creates innovation it is possible to look at those cities and counties that have a disproportionate amount of new market offerings. Technology organizations create a spillover influence in their regions that offers an opportunity for shared development (Feldman, 2000). In essence, the transferring of people, information, culture, and knowledge among a hub of businesses creates innovative synergy in the area. 

The research conducted by Fabrizio & Thomas (2012) helps solidify this understanding of innovative locality. The research used a panel dataset of new molecule innovation from the 56 largest pharmaceutical firms in nine different countries between 1992 and 2001. The study focused on analysis of the parent and sub-firms that reside in local markets even though they have international presence for their products. They reviewed 1,085 new market offerings from 1980 to 2001 trying to canvas innovation within the industry. They analyzed these findings with technology data and local information to come to a pattern of innovative development.

Results:

-Accumulated technical knowledge by measuring organizations patents determines innovation.

-Knowledge of the market also determines the pattern of innovations created. 

-Systems of organizations, culture, and similarity of industries in local regions impact innovation.

-The use of open innovation, networks, and knowledge sharing processes encourages innovation.

-There are no international pharmaceutical innovations only national ones that make their products available on the international markets.

-The local and national culture has an impact on the likelihood of innovation.

-It is recommended that innovative organizations establish themselves with the local market to understand consumer needs and develop new products.

The results shed light on the overall development of innovation within nations. Organizations that are innovative work best when located in a hub of like companies. The knowledge sharing among market members furthers the development of new ideas and concepts. Nations can foster this innovative process by developing such hubs similar to technology organizations in Silicon Valley or automotive manufacturing in the Detroit area. Furthermore, the national and regional culture also impacts the success of developing new innovative products for global market presence.

Fabrizio, K. & Thomas, L. (2012). The impact of local demand on innovation in a global industry. Strategic Management Journal, 33.

Feldman MP. (2000). Location and innovation: the new economic geography of innovation, spillovers, and agglomeration. In Oxford Handbook of Economic Geography, Clark G, Feldman M, Gertler M (eds). Oxford University Press: Oxford, UK; 373–394.

Griliches Z. 1995. R&D and productivity: econometric results and measurement issues. In Handbook of the Economics of Innovation and Technological Change, Stoneman P (ed). Blackwell: Oxford, UK; 52–89.

Kogut B. 1993. Country Competitiveness: Technology and the Organizing of Work . Oxford University Press: New York.

Polanyi M. 1966. The Tacit Dimension. Doubleday: Garden City, NY.

Schmookler J. 1966. Invention and Economic Growth Development. Harvard University Press: Cambridge, MA.
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