Content area
Full Text
Introduction
The industrial revolution was propelled by technological and social innovations and access to what economists describe as the 'traditional factors of production' - land, labour and capital. Importantly, in this mix, labour is treated as a factor of production, no different from land and capital - it is a resource that must be acquired and managed, just like any raw material or piece of technological equipment used in production. The hands/body were what mattered, rather than the brain, at least for the majority of employees. Indeed, the whole premise of Taylor's (1911) Scientific Management was that firms were inefficient because employees were using their brains, to ensure that they did the minimal amount of work - described as systematic soldiering. They could do this because they, and not their managers, had knowledge about the work they were doing. Taylor's idea was to transfer all knowledge to managers (an entirely different and very small group compared with the basic labourer) so that labour could be more efficiently utilized as a resource (and according to critics, further exploited as such - Braverman, 1998). Therefore, 'labour' did not include those scientists/inventors who created and developed the breakthrough technologies, nor the managers, who organized production to generate profits.
However, as global competition increased in the post-war era, driving the need for increased innovation to maintain a competitive advantage (Bolwijn and Kumpe, 1990), and as the provision of services became as important as the production of goods (Oliva and Kallenberg, 2003), there was a gradual recognition that 'labour' needed to be seen as more than simply the hands/body needed to carry out physical work. Firms also needed the workers' brains1 (their knowledge), since relying only on a small cadre (managers and scientists) for developing and introducing innovation was slow and a waste of talent. Thus, the term the 'knowledge economy' was born, popularized by the late Peter Drucker, initially in his book 'The Age of Discontinuity' in 1969 but really catching on in the academy in the 1990s, when the knowledge-based view of the firm emerged as a central idea in the strategy literature (Grant, 1996; Spender, 1996). While in some ways this was a revolutionary idea - that all workers could potentially contribute useful knowledge to...