Keywords: global competitiveness, sustainable competitive advantage, tacit knowledge, rates of innovation, appropriability of returns, knowledge management, dynamic strategy, knowledge creation, competitiveness cycle
A framework for sustainable advantage in global high-tech markets
Traditional competitiveness factors cannot provide a sustainable advantage in a highly dynamic, knowledge-driven global marketplace. This paper presents two models that describe evolving competition in technology-intensive industries and offer insight into the sources of long-term market leadership. The first model represents the value of technology-based products and services in terms of three orthogonal dimensions; their commodity content, and their embodiment of tacit and explicit knowledge. The second model identifies three sources of sustainable advantage over time: increasing rates of innovation, maximising the appropriability of returns from R&D, and the absorption and accumulation of valuable knowledge assets. These three elements form a self-reinforcing "competitiveness cycle" that is driven by increasing returns from knowledge-based products. The two models are subsequently merged into an integrated framework that identifies tacit knowledge as an essential source of sustainable competitive advantage, and provides guidance to firms in the formation of tacit-knowledge-enhancing strategies. A survey of the current knowledge-management literature and several case examples are mapped into the framework to demonstrate its effectiveness.