Knowledge market

Knowledge market is a mechanism for distributing knowledge resources. There are two views on knowledge and how knowledge markets can function. One view uses a legal construct of intellectual property to make knowledge a typical scarce resource, so the traditional commodity market mechanism can be applied directly to distribute it. An alternative model is based on treating knowledge as a public good and hence encouraging free sharing of knowledge. This is often referred to as attention economy. Currently there is no consensus among researchers on relative merits of these two approaches.

History

The knowledge economy brings with it the concept of exchanging knowledge-based products and services. However, as discussed by Stewart (1996)Stewart, Thomas A. 1996. Intellectual Capital - The New Wealth of Organizations, McGraw-Hill, 342 p.] , knowledge is very different from physical products. For example, it can be in more than one place at one time, selling it does not diminish the supply, buyers only purchase it once, and once sold, it cannot be recalled. Further, knowledge begets more knowledge in a never-ending cycle. Understanding of knowledge markets is beginning to emerge. As would be expected, they are very different in form from traditional markets.

Knowledge markets have been variously described by Stewart (1996), Davenport and Prusak (1998) [Davenport, Thomas and Lawrence Prusak. 1998. Working Knowledge - How Organizations Manage What They Know. Harvard Business School Press. 199 p.] , and Simard (2000) as a mechanism for enabling, supporting, and facilitating the mobilization, sharing, or exchange of information and knowledge among providers and users. This transactional approach assumes that knowledge-based products or services are available for distribution, that someone wants to use them, and that the primary focus of the market is to connect the two.

This perspective is appropriate when the market has limited or no interest or control over either the production or use of the content being exchanged, as is the case for most traditional markets. A provider-user perspective is also appropriate for emerging social networking "ideagoras" (Tapscott and Williams, 2006) [Tapscott, Don and Anthony D. Williams. 2006. Wikinomics - How Mass Collaboration Changes Everything. Penguin Group. 324 p.] , in which the primary function of the market is to match existing solutions with problems and problems with those who can find solutions.

From a production perspective, processes for creating wealth through the use of intellectual capital are explained by Nonaka (1991) [Nonaka, Ikujiro. 1991. The Knowledge Creating Company. Harvard Business Review, Nov.-Dec., p.14-37.] , Edvinsson and Malone (1997) [Edvinsson, Leif and Michael S. Malone. 1997. Intellectual Capital. Harper Business. 225 p.] , and Leonard (1998) [Leonard, Dorothy. 1998. Wellsprings of Knowledge. Harvard Business School Press. 334 p.] . At the marketing end of the spectrum, a number of authors, including Bishop (1996) [Bishop, Bill. 1996. Strategic Marketing for the Digital Age. Harper Business. 250 p.] , May (2000) [May, Paul. 2000. The Business of Ecommerce. Cambridge University Press. 270 p.] , and Tapscott et al. (2000) [Tapscott, Don, David Ticoll, and Alex Lowt. 2000. Digital Capital. Harvard Business School Press. 270 p.] describe the architecture and processes necessary to succeed in a digital economy.

Knowledge markets may also be sequential in nature. Simard (2006) [Simard, Albert. 2006. Knowledge markets: More than Providers and Users. IPSI BgD Internet Research Society Transactions, 2-2:4-9.] describes a cyclic end-to-end knowledge-market model comprising nine stages that embed, advance, or extract value into knowledge products and services along a knowledge services value chain. The first five stages are internal to a knowledge organization (production and transfer) while the last four stages are external (intermediaries, clients, and citizens). Because the value chain cyclic, it can be used to model either a supply (post-production evaluation ) or a demand (pre-production evaluation) approach to knowledge markets.

Knowledge Services

Knowledge services is an emerging concept that integrates knowledge management, a knowledge organization, and knowledge markets. Knowledge Services are programs that provide content-based (data, information, knowledge) organizational outputs (e.g., advice, answers, facilitation), to meet external user wants or needs. Knowledge services are delivered through knowledge markets.

St. Clair and Reich (2002) describe internal knowledge services as a management approach that integrates information management, knowledge management, and strategic learning into an enterprise-wide function. Kalakota and Robinson (2003) and Thomas (2005) developed service-oriented architectures for the private sector. Their focus was to transform traditional retail businesses by developing enterprise-wide platforms that support customer services. RocSearch (2006) take a broader external view, referring to a nascent knowledge services industry that goes beyond traditional cost and time leveraging advantages of the traditional consulting sector.

Simard et. al (2007) developed a holistic systems model of knowledge services for government S&T organizations. The model begins with generating new content and ends with sector outcomes and individual benefits. The model is independent of content, issues, or organizations. It is designed at a departmental level, but is scalable both upwards and downwards. The primary driver is a department’s legal mandate; a secondary driver is the needs of clients and residents. The model can function from either a supply or demand approach to knowledge markets. There are two levels of resolution - performance measurement, and classifying service-related activities.

There are four types of knowledge services: generate content, develop products, provide assistance, and share solutions. Knowledge services are modeled as a circular value chain comprising nine stages that embed, advance, or extract value from knowledge-based products and services. The stages are: generate, transform, manage, use internally, transfer, enhance, use professionally, use personally, and evaluate. (Simard, 2007) described a rich to reach service delivery spectrum that is segmented into categories of recipients, with associated levels of distribution, interactions, content complexity, and channels. The categories, from rich to reach, are: unique (once only), complex (science), technical (engineering), specialized (professional), simplified (popular), and mandatory (everyone).

From the perspective of knowledge markets, Mcgee and Prusak (1993) note that people barter for information, use it as an instrument of power, or trade it for information of greater value. Davenport and Prusak (1998) used a knowledge marketplace analogy to describe the exchange of knowledge among individuals and groups. However, Shapiro and Varian (1999) indicate that information markets will not resemble textbook competitive markets with many suppliers offering similar products but lacking the ability to influence prices. Simard (2006) described knowledge markets as a group of related circular knowledge-service value chains that function collectively as a sector, to embed, advance, and extract value to yield sector outcomes and individual benefits.

Internet-based knowledge markets

Several ways to create open and functional internet-based knowledge markets have been explored.

Fee-based knowledge markets

Fee-based knowledge markets are based on traditional market mechanisms that work well for traditional goods. So this approach treats knowledge as common goods. The buyer posts a request, normally in the form of a question and sets a price for the valid answer. Alternatively, the suppliers of knowledge (answerers) can post their bids to have the question answered.

Experts-Exchange was the first fee-based knowledge markets using a virtual currency. It provided a marketplace where buyers could offer payment to have their questions answered.

KnowledgeBid is a fee-based expert network that targets the investment community. Researchers can connect with and compensate primary information sources and industry experts.

Innocentive is a web-based open innovation marketplace. Firms post scientific problem and a choose a reward.

Google Answers was another implementation of this idea. This service allowed its users to offer bounties to expert researchers for answering their questions. The Google site was closed in 2006 [ [http://www.techcrunch.com/2006/11/29/google-has-no-answers/ Google Has No Answers ] ] , but Google recently launched a free knowledge exchange alternative (so far only available in Russia [ [http://googlerussiablog.blogspot.com/2007/06/google.html Официальный блог - Google Россия: «Вопросы и ответы» Google ] ] ).

This fee-based model is also implemented by Uclue, Bananask.com and some other sites [ [http://answers.google.com/answers/threadview?id=786568 Google Answers: Alternative Answer Site ] ] .

Free Knowledge Markets

Free knowledge markets use an alternative model treating knowledge as a public good.

3form Free Knowledge Exchange is likely to be the first internet market of this kind launched in Russia in 1998. It doesn't require to pay cash or virtual currency fee to have a question answered, however the attention of community to each question depends on the value contributed by its author to solving problems of other members of community (Kosorukoff and Goldberg, 2002) [Kosorukoff, A, Goldberg D. E. (2002), Genetic algorithm as a form of organization, Proceedings of Genetic and Evolutionary Computation Conference, GECCO-2002, pp 965-972] .

Knowledge iN, Yahoo Answers, Windows Live QnA, Ask Metafilter, , Google Questions and Answers and several other websites currently use free knowledge exchange model. However, none of these offer more than an increase in reputation as payment for researchers, often limiting the quality of the answers.

ee also

* Digital Economy
* Electronic business
* Electronic Commerce
* Information economy
* Knowledge Management
* Information Market
* Information Society
* Information Systems
* Internet Economy
* Knowledge Economy
* Knowledge Ecosystems
* Knowledge organization
* Knowledge policy
* Virtual economy
* Private intelligence agency
* Competitive intelligence
* Social Information Processing

References

Kalakota, Ravi and Marcia Robinson. 2003. Services Blueprint - Roadmap for Execution. Addison-Wesley, New York, NY. 354 p.

McGee, James and Lawrence Prusak. 1993. Managing Information Strategically. John Wiley and Sons, New York. p 12.

RocSearch Ltd. 2006. Knowledge Services Market. Soho, London, UK. 15p

St. Clair, Guy and Martina J. Reich. 2002. Knowledge Services: Financial Strategies & Budget. In: Information Outlook, Vol 6, No. 6 (June, 2002)

Shapiro, Carl and Hal R. Varian. 1999. Information Rules. Harvard Business School Press, Watertown, MA. p22.

Simard, Albert. 2007. Knowledge Services: The “Why” of Knowledge Management, in: Knowledge Management in Context. 24p (in press, preprint available)

Simard, Albert, Broome, John, Drury, Malcolm, Haddon, Brian, O’Neil, Robert and Pasho, David. 2007. Understanding Knowledge Services at Natural Resources Canada. NRCan, Office of the Chief Scientist, Ottawa, ON. 80p.

Thomas, Erl. 2005. Service-Oriented Architecture. Prentice-Hall, Upper Saddle River, NJ. 760 p

* Simard, Albert. 2005. Global Disaster Information network, in: UN World conference on Disaster Reduction, Kobe Japan, Jan 18-22, 2005.
* http://www.slideshare.net/Al.Simard/global-disaster-information-network
* http://www.slideshare.net/Al.Simard/knowledger-markets]
* http://www.slideshare.net/Al.Simard/knowledge-markets

Notes