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Customers now more than ever want what is new and innovative. The increase in technological awareness of customers created more needs for businesses to satisfy. More than ever, customers need to be connected, informed, entertained, and provided with "emotional" value.
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According to Brian Arthur of the Santa Fe Institute, it is an economy of increasing rather than diminishing returns. Once a product is adopted as the market standard, the cost of reproduction and production of new versions becomes minimal while the profits multiply.
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Business growth in the knowledge economy has been characterized by exponential growth in the service sector/industry; proliferation in the rate of mergers, acquisitions, and strategic alliances; and the rise of the start-up business model. Examination of each of these characteristics, and the growth
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Most organizations have adapted or transformed their management styles and business models to manage intellectual capital (IC) and respond to the IC-enabled dynamics of the knowledge economy.
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The most popular model, called the IC model, classifies IC into human, customer, and structural capital. Human capital includes employee competency, skills, brainpower, and tacit knowledge.
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Andriessen contends that using IC models that classify capital into generic forms that are applicable to all organizations, makes all organizations look the same and hence, does not enable strategic planning based on the unique and different combinations of IC that a particular organization has.
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The goal of IC measurement is not to determine how much knowledge or IC you have by counting the number of computers or key employees, but how effective the organization is in creating value from it
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