What does it mean to have a knowledge economy as your competitive advantage?

My Personal View

Starting any company will be a tremendous task for any individual, however, this understanding of a knowledge economy concept that is clear, online companies without any inventory or assets are making money in a way that is vastly different than the original concept of working a 9 to 5 job. Times are changing and the world is demanding more of each person to learn and utilize technology at a rapid pace to compete. Having a strategy to exploit and grow a business with a passive income stream, is more vital than ever before. The best time to start an online company is now. Controlling all your knowledge base assets in a way to leverage your experience under your own brand is the new form of business that’s taking individuals to financial freedoms that was not possible before. It is my vision that brick and mortar companies will decline in the years to come.

In the development of my own online company, these are the individuals that inspired and informed as to the importance within this space of knowledge economy (passive income). I learned from each one of these persons that give me inspiration on a daily basis how to better improve in this shared space.

Pat Flynn http://www.smartpassiveincome.com/

Brandon Clay http://tradingstory.com/playlist/

Jay Jones http://blackentrepreneurblueprint.com/

Tim Ferriss http://fourhourworkweek.com/blog/


The purpose of this article is to discuss the similarities and differences of the originators specializing in competitive advantages such as Mintzberg, Porter, Barney and subsequent works on the subject matter of this stream of literature with a focus on a knowledge economy. My hypothesis is having a competitive edge is one of the advantages of taking control over a market that gives an organization above average performance metrics as the concept of knowledge management leads, compared to all other theories proposed because society is undergoing a transformation from capital and labor based economies into knowledge economies ((Blumen, 2003).

Keywords: competitive advantage, knowledge management

The research concluded by Jaynie L. Smith for the book Creating Competitive Advantage claimed that out of 1000 surveys only two CEO’s were able to identify and define their companies competitive advantage (Goldsmith, 2013).

Literature Review

This section reviews the literature relating to competitive advantage and knowledge management conceptualized by which defies having a leadership structure that knows how to inspire and allows a company to innovate from within.

Competitive Advantage

Sustainable competitive advantage is the ability for companies to achieve a long-run survival and success (Hoffman, 2000). The results are created from implementing a value chain strategy that is not being employed by any other competitor (Carpenter, 1999). Peters (1987) argues a uniqueness will place a company ahead of its competition. One common skill that places personnel ahead of its competitors are utilizing two resources such as personnel skills and resources when used correctly in the training of personnel, leveraging technology and building customer intimacy will help competitive advantage (Day & Wensley, 1988). However, this ability only works if the customer views this as a benefit (Bharadwaj, et al., 1993).

Knowledge management

Briotta, Gardner, & Matosky, (2015) claimed that we as humans have always managed knowledge, but as a field of study Knowledge Management (KM) only dates back to 1990s, however despite the short timeframe many organizations feel, they will lose their competitive advantage unless they innovate, develop and utilize their knowledge as a strategic asset (Zack, 2002).

Zack, (2002) further postulate:

“Knowledge is commonly distinguished from data and information. Data represent observations or facts out of context, and therefore not directly meaningful. Information results from placing data within some meaningful context, often in the form of a message. Knowledge is that which we come to believe and value based on the meaningfully organized accumulation of information (messages) through experience, communication or inference. Knowledge can be viewed both as a thing to be stored and manipulated and as a process of simultaneously knowing and acting – that is, applying expertise. As a practical matter, organizations need to manage knowledge both as object and process.”

Mintzberg Point of View

Mintzberg approach is different in that, he argued that in an unpredictable environment it is impossible to formulate an explicit strategy before the trial as the experience process has to run its course and further probing postulated, that it is not necessary to make strategy explicit in a predictable environment (Ansoff, 1991).

“Mintzberg contends that the “rational/analytical” model of management that is taught in business programs is not representative of what managers actually do.”

The foundation of Mintzberg argument is the support bases for a knowledge economy such that management learns quickly, Fillion (2015), proclaimed a shift of change of growing complexity is continually accelerating thus, this new context continually requires the greater capability of adaptation, relegating to us the responsibility of our learning (Lapointe, 1998).

Porter Point of view

Even though Porter gave the world, and contributed towards Resource Base View (RBV) and the development of the five forces concepts, his views on the transformation of capital is in alignment with a knowledge economy. In an interview with Michael Porter exploring social entrepreneurship in the context of the transformation of capital suggest the creation of shared value and a capitalist system that’s part of the core aspect of every business (Driver, 2012).

Driver (2012), further postulated that Porter is calling on a radical transformation in which business schools teachers shared values that not only include the entire value chain of business but also a deeper human need as well.

This concept is in alignment with a knowledge economy and all its concepts as defined.

Barney Point of view

Barney (2002) contends that he was influenced by Porter as a critic of the RBV and realized that this created a wider dialog in the field of strategic management in which he was honored. The research of Barney was concentrated around Resource-Base Theory for understanding sustainable competitive advantages as there are no connections between knowledge economy and the writings of Barney.

Subsequent work

All subsequent works on Knowledge economy and sustainable competitive advantage are saying similarities such that over the past twenty years the world economy has evolved at a rapid rate such that capital assets and knowledge is mobile which increases competition (Baulant, 2015).

Similar to the transition from the industrial age to the modern day economy, the balance between innovation and business is a complex process that requires cooperation that must focus on establishing “win-win situations” in creating networks that drive innovative strategies (Baulant, 2015).

Technology has impacted the works of the knowledge economy and its effect on globalization where a competitive advantage can no longer be achieved in a business which does not rely on the use of information technologies (Boljanović, 2014). Knowledge-intensive services are considered a key driver for innovation and competitiveness (Colombo, Dell’Era, & Frattini 2015).

There are a few studies that conflict with the transference of knowledge between universities and industry such as Schofield (2013), concluded that developing innovation supply chains and knowledge transfer ecosystems play a vital role in university-industry collaboration and its effectiveness that ensures competitiveness, knowledge transfer and developing knowledge-based economies which imply advantage. However, this transference is not conducted within an easy process at the organizational level (Garratt, 1999). Companies facing these challenges utilize new technologies available inside the company that allows their employees to work, think and act globally (Massey & Waker, 1999).


The summation of knowledge learning and a company that learns as a competitive strategy is compiling, however the streams of literature in support of the evidence is changing the landscape to reveal how the shift in a knowledge base economy is redefining firms by empowering individuals and linking the bridge between learning and work (Blumen, 2003).

This concept of the knowledge economy is fast becoming the global capital according to Burton-Jones (2001), and in alignment with our point of view that RBV will have a place in competitive advantage but not as much as knowledge economies as the world’s demands are changing.

The vision of creating the end results first is fast becoming the expansion of organization where people are continually developing a capacity to natural patterns of thinking, where collective aspirations are set free as people are continually learning how to learn together (Senge, 1990).

This concept of shared value learning in a knowledge economy is shared by Mintzberg, Porter and others in an effort for a single objective of strategic management research facilitating the development of the field in an attempt to understand the conditions in which a firm could obtain superior economic performance with all of its resources but exclusively its knowledge base and its technological advantage (Bordeianu & Buta, 2015).


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