ABSTRACT

In 1993 the business analyst Peter Drucker argued that the traditional economic categories of land, capital and labour were being overtaken by knowledge as the source of profit.1 What he meant by this was that in the global economy, where there is no market which is safe from new entrants who can reproduce the advantages of existing firms in terms of economic inputs, only knowledge remains as a competitive advantage which cannot easily be replicated. In Schumpeter’s terms, if all profit is a quasi-rent on innovation, which will ultimately be eaten away by ‘normal’ competition, only a continuous process of innovation based on extending and developing existing sources of competitive advantage will protect firms from the pressures of the market. In the context of our investigation, the bodies of knowledge Drucker discusses will necessarily rest on a specific and dynamic mass of tacit and implicit components.