The influence of knowledge management and intellectual capital on organizational innovations

This paper is based on an on-going postgraduate research study, which is aimed at investigating the role of knowledge management and intellectual capital assets on organizational innovations in project based industries. The central hypothesis to the study is that by effecting knowledge management (KM) and managing intellectual capital (IC) there is wider scope for the generation, implementation and exploitation of organizational innovations. The study employs a combination of research approaches, including ethnographic interviews, semi-structured interviews, postal questionnaires and the analysis of archive documents. The paper explores the factors that favour effective implementation of KM and IC in organizations, and examines the link between such factors and the generation of ideas for innovation. Innovation is viewed as the successful exploitation of an idea, which is new to the unit of adoption. It can also be viewed as a process dependent on the tacit knowledge of individuals, motivated by the capacity for intuition and creativity in every human being. Therefore, the cultivation of an environment conducive to human creativity and freedom of thought is essential for innovation generation. This paper argues that KM and IC management are important pre-requisites for this process to succeed. In addition to the thorough review of the relevant literature, the paper draws its tentative conclusions from ethnographic interviews with senior, mid-level and junior personnel from different organizations. It concludes that KM and IC contribute to process and product innovations in different complex ways. The role of culture, networking (systems and people), motivation, organizational systems and structure are important in this regard. From a construction industry context, there is very little empirical study on the impact and measurement of knowledge management and intellectual capital on incremental and radical innovations in projects and in the wider organization context. There is therefore ample scope for research in the area.