The creation and management of knowledge: what can we learn from applying the principles of economics?

This paper attempts to assess the role of orthodox Economics in the increasingly prominent area of Knowledge Management. More specifically, it serves three purposes: first, it explores the definitions and understanding of knowledge, knowledge creation and knowledge management from a variety of different academic perspectives; second, in addition to the acquisition of knowledge and by reference to a neighbouring concept – the acquisition of skills – it investigates whether the mainstream principles of Economics as an analytical discipline can be usefully deployed as tools to add to a better understanding of the application of the creation and management of knowledge. Although the Economics of Knowledge Management is seen as an embryonic area for development, it can be shown that the orthodox economic analysis of the components of knowledge management can produce constructive outcomes. It follows that the third purpose of the paper is an attempt to inspire others to join the field.