Knowledge assets
At the base of knowledge-creating processes are knowledge assets. We define assets as `firm-specific resources that are
indispensable to create values for the firm'. Knowledge assets are the inputs, outputs and moderating factors of the knowledge-creating process. For example, trust amongst organisational members is created as an output of the knowledge creating process, and at the same time it moderates how ba functions as a platform for the knowledge-creating process.
Although knowledge is considered to be one of the most important assets for a firm to create a sustainable competitive advantage today, we do not yet have an effective system and tools for evaluating and managing knowledge assets. Although a variety of measures have been proposed,25 existing accounting systems are inadequate for capturing the value of knowledge assets, due to the tacit nature of knowledge. Knowledge assets must be built and used internally in order for their full value to be realised, as they cannot be readily bought and sold. We need to build a system to evaluate and manage the knowledge assets of a firm more effectively. Another difficulty in measuring
knowledge assets is that they are dynamic. Knowledge assets are both inputs and outputs of the organisation's knowledge creating activities, and hence they are constantly evolving. Taking a snapshot of the knowledge assets that the organisation owns at one point in time is never enough to evaluate and manage the knowledge assets properly.
To understand how knowledge assets are created, acquired and exploited, we propose to categorise knowledge assets into four types: experiential knowledge assets, conceptual knowledge assets, systemic knowledge assets and routine knowledge assets
(see Figure 7).