Knowledge & Information System: Part-1

This is a multipart post intended to discuss the concepts of Information & Knowledge System. Let me first introduce some of the concepts which I will be using for my blog entry.

1. Knowledge Cycle

As shown in the image above, there are three stages of Knowledge cycle: generation >> standardization >> dissemination >> generation…….. Knowledge generation happens everywhere: in your kitchen while experimenting with food or in field where a farmer irrigates his field in a particular manner or in lab where a person is experimenting with chemicals testing its effects. Standardization is developing some standards/codes and politically enforcing it to a political territory. For example the SI system. It standardizes the length, temp, time, mass etc. Countries which are signatory to the SI system enforce this system in their political territory. Industries, educational institutions and R&D labs follow these standards to make products or teach pupils or do research. Dissemination is a process through which standardized research is communicated to a wider population for them to follow it. For example, standards are embedded in education and taught. Conferences, workshops and different crash courses are organized to disseminate standardized knowledge to industry, academia and scientific community.

2. Role of Formal Education: Role of formal education is to disseminate standardized knowledge to pupils and make them employable in the job market so that they can contribute to the industrial production systems and governance.

3. Pricing of a product, Knowledge components:
Pricing of any product has four components which can be represented in the following diagram:

Product Pricing based on Value Addition
These are:
a. Labor, Rent Raw Material: These contribute the primary input of a product /service. It can assure only subsistence level pricing of the product.
b. Intellectual Property: This contributes to innovation based inputs of a product/ service. It empowers innovation and creates incentive mechanisms for innovators and enterprises.
c. Standardization: This contributes to technology governance related inputs of a product/service. Standardization is a set of technical standards for coordination among different producers, suppliers and consumers of a product/service. It is politically/legally enforced framework to ensure interoperability, compatibility, safety, dimension and quality for products & services. If similar standards are followed over a bigger geographical area then it helps enterprises in better bargaining for their products and strategic positioning in the market. For example, if dimensions of hammers are fixed and hammer are standardized as Grade-A Hammer, Grade-B Hammer, Grade-C Hammer and Grade-D Hammer. If all the blacksmith follow the same standards then every blacksmith can bargain a fixed price for it. Similarly, if foodgrains are standardized then farmers can get better prices in the market.
d. Quality Productivity: This contributes to the quality & productivity related components of a product/service. It helps in better branding by highlighting some quality & features. It helps enterprises in optimization of their efforts & inputs keeping quality and standards fixed.

Labor, raw material and rent on capital is subsistence component of a product/service while other three are knowledge components of a product/service. The subsistence pricing always gives very low returns or more specifically decreasing rate of returns.

India lacks effective regimes or policy or vision for intellectual property generation & definition; standardization of products & services; and enhancing quality & productivity in almost all sectors. Due to this, knowledge components are completely missing in Indian economic activities bringing major economic sectors to the path of decreasing returns. If India has to create employment for her ever increasing population and bring quality of life to every Indian, it needs to emphasize a lot on innovation empowering every Indian to innovate and become an important actor in achieving sustainable development.

4. Standardization and its role in modern technology & business: There is a company C having origin in nation N. Company C develops a new type of vehicle tyres with the help of its R&D. Now nation N partners with C. The new type of tyre is endorsed by the government of nation N and it redefines its standards to favor this new type of tyres. After this standardization, all other tyre manufacturers are forced to produce this new type of tyre but they can’t because they don’t have the necessary expertise. So, they buy license from company C to produce these tyres. Naturally Company C will be able to generate more profit than any other company in producing tyres. Now, if the nation N is economically powerful (either in terms of producer or in terms of consumer), it will affect standards globally. In some of the cases in which company C is a global leader in tyre-making then all other firms will start following it making standards of Nation N as a bigger standard followed in large number of countries.

One other example: Internet is regulated, standardized and encashed mostly by US. It is so because US invented it. Later it developed standards for internet regulation in such a manner that American companies always have the market-leader position. Therefore, it is very likely that any leading internet-based company will originate from US. Other nations have to just follow it until they develop their own standards and make it autonomous or compatible with US one.

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  1. Reblogged this on mistybarriers and commented:
    Interesting

  2. Thanks 🙂 But how did you reach to this blog post?

  3. Neat effective diagram caught my eye. So I read the post and as they say “the rest is…”

  4. hmm 🙂 this topic: Knowledge System is very difficult to communicate… i have been trying to communicate it for a long time…. but have come up with simple explanations only recently….

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