Three Threats Facing Business Leaders in the Knowledge Economy
Strategies to combat dangers, drive productivity enhancements, and build present and future prosperity
Few will contest the fact that businesses in the 21st century are at risk of remaining competitive in a dynamic new world economy. In the foreseeable future we will see dramatic shifts in global economic leadership, with the transition to a worldwide knowledge-driven economy. This shift will place new demands on organizations to maximize the use of their most critical assets to remain competitive.
In the 20th century, America, Japan, and countries in Western Europe became the world’s dominate economic powers. And while one might argue the reasons why, three stand out most of all: political freedom, open market economies, and the effective utilization of material, capital and human assets. These factors will also prove important to success in the 21st century; however, many of the dominant economies of the 20th century will lose their positioning during the first half of this century. Two game-changing trends are factors that will lead to the loss of dominance by the traditional 20th century powerhouses.
In just the past 150 years, three distinct economic eras have evolved to propel society’s development and growth, especially in the developed countries: the Agrarian Age, the Industrial Age, and the Information Age. With the advent of each Age, one driving force above all others has defined the capability of countries and businesses to thrive during the span of each era—man’s ability to leverage resources. During the Agrarian Age it was man’s ability to leverage nature, land, and animals; in the Industrial Age it was his ability to leverage capital, raw materials, and mechanization. During the Information Age it is mans’ ability to leverage technological innovation, intellectual capital, applied knowledge, and human capabilities. As societies move through each stage of economic development—whether within an Age or across the Ages—the ability for countries and businesses alike to thrive is predicated upon how effectively they utilize their critical assets. Moreover, in today’s knowledge-based economy, especially one fuelled by globalization and impacted (positively or negatively) by economic conditions, the effective use of people and their knowledge and capabilities is more critical to competitiveness than in any previous era.
While there are numerous threats facing businesses in today’s globally competitive and economically-challenging business environment, there are three threats that must be understood and acted upon to succeed in a knowledge-driven economy. They are: 1) Failure to understand the criticality of human capital assets, 2) Failure to understand the necessity for ongoing skills development, and 3) Failure to understand the strategic and practical value of training.
Admittedly, the dangers related to the threats discussed herein are not as overt as those posed by a severe economic downturn or perhaps other direct and/or individualized business threats. Rather, they are quite subtle, and moreover, their impacts are not usually felt as quickly. However, they are indeed real, and if not addressed adequately serious negative consequences could occur rendering a business incapable of maximizing the utility of the one asset most critical to thriving in the knowledge economy; HUMAN CAPITAL.
As with almost any threat, there are strategies that business leaders may employ to minimize, if not eliminate, the threats presented herein. In doing so, they can position their organizations to thrive in the knowledge economy, improve top-line revenue and bottom-line profitability, heighten productivity, and/or reduce cost. Additionally, these actions will increase employee morale and retention, improve customer satisfaction and loyalty, and fulfill their respective mission, values, and goals. That said; the three strategies that will contribute to success today are: 1) Focusing on PEOPLE, 2) Continuously training and developing the workforce, and 3) Choosing the correct partner.
Presented in this document are three threats facing business leaders in the knowledge economy and strategies to combat the dangers, drive productivity enhancements, and build present and future prosperity. It is provided to business leaders to help them: 1) fully comprehend the critical nature of workplace learning and develop in the knowledge-driven economy, 2) understand the business imperative for taking the appropriate action to make workforce development a core component of their long-term business strategy, and 3) appreciate the importance of choosing the right training and development partner in today’s business environment.
The research and production of this educational briefing was sponsored by IMPACT60 Learning Systems®, LLC.