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Barking up the Wrong Tree

Submitted by on 12 Jul 2012 – 12:33

By Jaap Dijkstra, Director of Studies of Faculty of Law at University of Groningen

In Lisbon 2000 the European Union set some important goals that should make Europe, by 2010, the most competitive knowledge-based economy in the world. However, some of these goals seem to have led us into the opposite direction. The most important goal is that we wanted to have fifty percent of citizens within the European Union who are educated at a higher-education institution. For a number of reasons this is a target that is endangering the quality of our educational programs and therefore it is endangering the European knowledge economy. It may help to look at some lessons from the field of knowledge management to see the pitfalls we should avoid.

When I was working as a researcher at the Telematica Institute in a knowledge management project, I learned an important lesson about knowledge workers. A local factory had hired us to solve a knowledge management problem. They had a maintenance department within the company and most of the employees in this department would reach their pensionable age within the next ten years. These employees were mostly lower educated technicians and they learned most of their skills on the job. Their managing director acknowledged the problem that when he would need to replace these technicians it would take a long time to get new technicians at the same level of competence. He thought that he might overcome this problem by storing all the important maintenance knowledge into a computer system. However, this turned out to be impossible as well as too expensive. These were the lessons from knowledge management in its early stages. Knowledge itself is important but only through knowledgeable people. Educating or training people is the key factor in knowledge management.

The lesson I learned is that knowledge workers are not necessarily higher educated employees. A knowledge worker is somebody who is hard to replace because of his or her unique knowledge or skills. Within this company there was for instance one technician who was the only person who could maintain a machine that was worth a million euro. When this man would leave the company they could virtually throw away the machine. They estimated that it would take five to ten years to train a new technician to do this job. This lower educated technician was one of the most important knowledge workers within the company.

Another lesson you can learn from knowledge management is that it is almost impossible to quantify achievements in knowledge management. In Sweden Leif Edvinsson has worked for a long time to develop an instrument for the insurance company Skandia to measure knowledge. He convinced the board of directors that they were looking at the wrong figures if they only would take the financial numbers into account. He compared the company with an apple tree. The apples are the profits the company is making. But if you want to say something about next year’s harvest you should not look at the apples but at the roots of the tree. In a knowledge-based economy knowledge is the most important production factor; it is the company’s roots. If you want to learn something about the future of a company, you should not measure its profits but you should measure the knowledge present in the company: the so-called intellectual capital. However, it turned out that knowledge itself is very hard to quantify. For instance, when a company would train its staff on a regular basis, it is easy to calculate the costs but it is very hard to quantify the profits. Of course you could count the number of diplomas but does that really say that the company became more competitive? And does for instance the number of patents really reflect the innovative power of a company? You can get a patent on a worthless invention or even on an invention which isn’t an invention. I think I could get a patent on gun powder or on ‘the wheel’ at the Dutch patent office. The best thing Edvinsson could come up with was an instrument (the Skandia navigator) that gives some kind of relative indication of the intellectual capital. Actually measuring intellectual capital turned out to be impossible.

So what are the lessons to learn? That good education is at the roots of a country’s knowledge-based economy. But you do not bring about good education using simplified indicators to measure it. Measuring the number of diplomas or the percentages of students who get their degree within four years, hardly says anything about a country’s innovative strength. It might even say that you have poor standards for giving bachelor and master degrees: rotten apples or rotten roots. Moreover, if we want strong knowledge workers, we need the lower educated technicians as well and we have literally counted them out.

What we should do is to make knowledge important within our society. Being a teacher should be a highly respected profession. Studying, be it in college or for some craftsmanship, should be socially rewarding. At our universities teaching and doing research should be equally valued. However, changing a culture is a hard thing to do. Though companies like Google and Nokia already learned that it is the only thing that really matters. A politician who got this message right is Tarja Halonen when she said that Finland should try to get boys keen on doing well at school. Cultural changes like that, and not the number of master degrees, are the things that really count when trying to become a competitive knowledge-based economy.