ABSTRACT
New Information and Communication Technologies (ICTs) are intimately linked to development of the knowledge-based economy, and the role of knowledge-intensive business service firms in it. At the centre of a new and evolving technological system, increasingly based on localized, highly specific knowledge, new ICTs determine the state of technological innovation. The conceivable impact of such knowledge on the whole industrial matrix, from its original inception to its refinement and imitation by downstream users, makes new information technology a radical innovation. New ICTs profoundly affect opportunities to access, retrieve, process and store information. Localized technological innovations involve different combinations of tacit and generic knowledge. The innovation literature to date has emphasized the economic importance of generic knowledge, that is organized scientific knowledge, resulting from formal Research and Development. The innovative characteristics of the firm and its surrounding system dictate the terms of communication between firms, ultimately determining their innovative capabilities.
