Absorptive Capacity, Forms of Knowledge and Economic Development

Abstract

The distinction between tacit and codified knowledge introduced by Polanyi now seems to be accepted and regarded as motivating and important by almost everyone interested in the economics of knowledge and innovation. In this paper we take departure from the increasing interest for and literature about knowledge and introduce a new distinction between two modes of learning and innovation inspired by the distinction between implicit and explicit knowledge. On the one hand there are innovation strategies (STI-mode of innovation) that give main emphasis to promoting R&D and creating access to explicit codified knowledge. On the other hand there are innovation strategies (DUI-mode of innovation) that are based on learning by doing, using and interaction. These will typically aim at creating organizational frameworks and relationships between employees that utilize implicit knowledge and promote interactive learning.