A new perspective on the knowledge value chain
| DOI | https://doi.org/10.1108/14691930310504581 |
| Pages | 588-596 |
| Date | 01 December 2003 |
| Published date | 01 December 2003 |
| Author | Clark Eustace |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
A new perspective on the
knowledge value chain
Clark Eustace
Mantos Consulting Ltd, Surrey, UK
Keywords Knowledge, Value chain, Intangible assets, Disclosure
Abstract This article presents an interpretation of some major changes affecting the competitive
behaviour of firms today. The underlying postulate is a shift from tangible to intangible factors of
competitive advantage – from natural resources, machinery and financial capital, now regarded
as commodities, to “non-price” factors of competition. The accelerating pace of value-chain erosion
is driving a relentless search for new factors of differentiation and market leverage, with the result
that firms are trying to create, maintain or invade monopolies founded on intangibles. This has led
to some subtle, but highly significant, shifts in the economy, which have gone largely undetected.
Accordingly, the paper argues the case for transparency, and calls for much richer disclosure of the
real asset base of firms and public enterprises. In developing these ideas, the paper presents a new
perspective on the knowledge value chain, and concludes by examining some of the challenges for
the European policy community, based on the preliminary results of the PRISM research initiative.
Introduction
In October 2000, the European high-level expert group on the intangible
economy presented new evidence on the influence of business intangibles on
economic performance and productivity[1]. Following on from this, a two-year
programme of socio-economic and policy research was launched under the
auspices of the European Commission IST programme to bring together
leading experts from the business, academic and policy communities working
in this field. The initiative, known as PRISM, involves eight academic
institutions in seven European countries[2] and is supported by an advisory
council of experts from the business community.
Key conclusions
(1) How does the modern knowledge economy differ from what we had before?
In the past, competitive advantage was attributed to the successful exploitation
of scale economies underpinned by a unique technology or dominance of a
geographical market or supply-chain. This was always an over-simplification,
and it is now widely accepted that winning strategies are more often grounded
in the accumulation and creative exploitation of intangibles. The empirical
evidence suggests that successful players in competitive markets are those that
have access to a corpus of unique – or at least difficult-to-replicate –
capabilities and competences. It is these that provide the mainspring of
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
http://www.emeraldinsight.com/researchregister http://www.emeraldinsight.com/1469-1930.htm
Based on a presentation given on 25 November 2002 at the Autonomous University of Madrid.
The author is Director of the PRISM initiative, and an Honorary Visiting Fellow of Cass Business
School, London.
JIC
4,4
588
Journal of Intellectual Capital
Vol. 4 No. 4, 2003
pp. 588-596
qMCB UP Limited
1469-1930
DOI 10.1108/14691930310504581
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