Research on Knowledge Gap Recognition Mechanism of Virtual Industry Cluster

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1 Research Journa of Appied Sciences, Engineering and Technoogy 5(14): , 2013 ISSN: ; e-issn: Maxwe Scientific Organization, 2013 Submitted: October 17, 2012 Accepted: December 10, 2012 Pubished: Apri 20, 2013 Research on Knowedge Gap Recognition Mechanism of Virtua Industry Custer Lu Cheng Schoo of Marketing Management, Liaoning Technica University, Huudao , China Abstract: As a new organizing form, VIC gets rid of regiona imit of traditiona custer, reaizing virtua space aggomeration which crossing space and time. Knowedge sharing and compementary is foundation to form VIC and be one of the main goas. As preparation of the knowedge transfer, recognizing and making up for knowedge gap did not caused most schoars' attention. This study argues that, knowedge gap recognition is the premise of knowedge transfer, combined with knowedge theories, the connotation of knowedge gap were introduced. Based on the cassification of strategic management of knowedge, we got knowedge gap types and designed recognition process of knowedge gap from endogenous and exogenous factors. We had respectivey detai anaysis on both knowedge demand and suppy. This study used Bipartite Graph Theory to match knowedge gap between two sides, studied six costs which might occur during the process of make up for knowedge gap and according to the costs to choose the way to fi the gap. Keywords: Choice fis approach, knowedge gap, recognition INTRODUCTION OF VIC The concept of Virtua Industry Custers (VIC) first came from a EU 'SACFA proect granted by San Pauo, 7 universities coege consisting of a research network, VIC was considered to be a patform which be composed of some enterprise who have certain expertise (Moina et a., 1998) and its main function was to provide and adust members through the core competence of enterprises and to participate in the virtua enterprise operation, thus made members share market opportunities (Moina et a., 2001). Most schoars agreed that VIC is an organic integration by virtua enterprise and industria custer. The main different characteristics from traditiona custers are: Across spatia, means the enterprises had get off spatia imits and reaized the goba interconnected Virtua, enterprises can overcome the time restrictions Organization proximity distribution of the industria chain aong the upstream and downstream firms and reated enterprise, institution, organization and even government departments in virtua space were coected, reaized the knowedge sharing and compementary among the custer (Wieser, 2002). KNOWLEDGE GAP Knowedge gap and its types: Some schoars beieve that there is technica knowedge distance between different enterprise and it is the resuts of enterprise pursue to output and particuar technoogy (Griiches, Fig. 1: Knowedge gap between enterprises Fig. 2: Based on the enterprise strategic vaue perspective knowedge cassification 1984), some schoars ca it technica abiity gap or inteectua gap (Wei, 2003; Du and Jiang, 2004). We have no one unified expression now. In this study, we ca it knowedge gap, which means when enterprises in 3810

2 Res. J. App. Sci. Eng. Techno., 5(14): , 2013 Tabe 1: Knowedge gap types and causes Knowedge gap type Causes Fiing cost Core knowedge gap Advanced knowedge gap Innovation knowedge gap Enterprise ack of profession basic knowedge to impementation of mutipe deveopment strategy Enterprise knowedge resources needed to meet a the knowedge innovation or existing knowedge technoogy was not enough to be a competitive advantage Enterprise as the pursuit of industry absoutey eading position, innovation activities required knowedge resources shortage and produce knowedge gap Lower Medium High VIC get knowedge transfer activities, the knowedge sender (overfow) and knowedge receiver (earning) have knowedge gap between them and this gap mainy performances in the knowedge stock and knowedge structure. Knowedge gap is made by enterprise knowedge eve between compared each other, which beongs to the category of the comparison, ike shown in Fig. 1. From the view of strategic vaue, Michae divided enterprise knowedge into three categories: core knowedge, advanced knowedge and innovation knowedge (Michae, 1999), which is shown in Fig. 2. Thus, the knowedge gap between enterprises can be divided into: core knowedge gap, advanced knowedge gap and innovation knowedge gap. With their knowedge strategic vaue of the business are different, so, the above three kinds of knowedge gap causes are different ways. Of course the cost to fiing the gap, which is shown as Tabe 1, is different too Haider (2003). Knowedge gap recognition process: his study designed knowedge gap recognition process. Firsty, cassified knowedge gap, secondy, factors of endogenous and exogenous of knowedge demand and knowedge suppy were anayzed respectivey, thirdy, matched both the suppy and the demand, finay, according to the cost anaysis to choose fiing approach of knowedge gap, ust ike shown in Fig. 3. Fig. 3: Knowedge gap offset process 3811

3 Res. J. App. Sci. Eng. Techno., 5(14): , 2013 KNOWLEDGE GAP RECOGNITION We wi recognize the knowedge gap from suppy and demand two aspects. Generation of knowedge demand: Enterprise knowedge demand is how to arise? Enterprise aways has constant pursuit to innovation and that makes some knowedge resources ess to satisfy innovative activities need, it produces the enterprise knowedge demand. The generation of knowedge demand can be divided into exogenous and endogenous factor reasons. Exogenous factors incude industry and system factors. Industry factors means industry environment change and competitiveness, etc. System factors incude the government poicy or the industry such as the change of the rues. Furthermore, a exogenous factors demand can be boied down to market opportunity. Endogenous factors are usuay refers to the enterprise interna demand factors, generay incude: the enterprise itsef knowedge resource deposit and enterprise strategic direction, management concept, enterprise innovation abiity and other factors. Usuay, the exogenous factors to the generation of new knowedge needs and endogenous factor, which can hep the enterprises to identify as new knowedge demand by the knowedge gap produced. So on; make recognition and udgment to the knowedge gap based on knowedge shortage. And, endogenous factor can aso hep enterprises promote knowedge earning and innovation and other activities. Both exogenous and endogenous factors changes coud produce knowedge enterprise needs. Knowedge needs anaysis: In this study, VIC's knowedge transfer between enterprises is defined as Tabe 2: Acquisition of knowedge demand KE Knowedge needs K 1 Y 1, Y 2 K 2 Y 1, Y 3, Y 4 K 3 Y 5 K i K m Y Y M-1,Y M the knowedge resources sharing among enterprises. This kind of sharing derives from knowedge suppy to demand. Knowedge demand derives from knowedge gap created by key events during enterprises faced. Key events (KE) is mosty invoving knowedge eve, category factors such as the time span, aso incuding the knowedge structure and earning abiity of the earning party. KE generate knowedge demand and each KE wi produce one or severa knowedge demand, KE set is K = {k i }(i = 1, 2, m), each KE derives knowedge demand Y, shown in Tabe 2, knowedge demand set is Y = {Y }( = 1, 2, M), KE and knowedge demand is not exacty corresponding, so = 1, 2, M. Knowedge suppy of enterprise can be descript from knowedge type, knowedge eve, knowedge strategic vaue, overfow eve of the knowedge spiovers, its set is X = {X }( = 1,2, N). Most of knowedge is tacit knowedge and must be exist and transfer by attaching some carriers, ike empoyees, team, equipments, spiovers media, organizationa cuture, etc. Knowedge suppy set {X } is in the above many knowedge carriers. Using enterprise interna knowedge map can hep us to find enterprise knowedge suppy set {X }. Its essence is one-to-one reationship between various kinds of knowedge and the attached carriers in enterprise business fow. Hypothesis enterprise knowedge has four types Fig. 4: Knowedge suppy anaysis 3812

4 Res. J. App. Sci. Eng. Techno., 5(14): , 2013 Fig. 5: Knowedge needs and knowedge suppy matching knowedge: M. N, O, P and can aso subdivision. Incuding persona, team, equipment, enterprise cuture and others are knowedge carriers. We can structure enterprise knowedge map, shown in Fig. 4. Knowedge matching: We have aready had knowedge demand and suppy anaysis. This study appied Bipartite Graph Theory to matching both sides. Set the tota number of knowedge suppy and demand within the. VIC as point set. The contact between the two sides caed edge set. Then the suppy and demand of knowedge matching avaiabe within VIC can be expressed as: G = (V,E). By matching definition, there are many kinds of matching reation inside VIC. A matching form the matching set. Spit point set V intox and Y and V = X Y,X Y = φ, between X and Y is edge X Y, constitute edge set E',so E' = (E' = X Y, (X XX, YY YYR)),graph M = (X, Y, E') composed bx, Y and E'. This study wants to get optima matching for the graph. Estabish matching mode: From above anaysis, we can know G = (V, E) is a fu weighted binary chart, its mapping definitions for: L:V(G) R, each edge in G, e = {X, Y } a meets the foowing inequaity: ( x ) ( y ) ω( x y ) +, (1) ω (x, y ) is weights of e, is feasibe top caibration of G: { X, Y }{ X, Y } E( G), ( X ) + ( Y ) ω( X Y )} E =, (2) Among them, G is generation son graph which for edge to E. So we can ca G is equa son graph to, if G has a perfect match M, then M is aso optima matching to G (Yin and Kaiya, 2003). This study constructing mode as shown in Fig. 5. Mode soving: By continuousy revised feasibe vertex abe, we can get optima matching of the mode. There are many ways to soving the mode, in this study we use Kuhn-Munches agorithm, described beow: Step 1: Any given a feasibe vertex, then make sure is equa son graph to G,find match coocation M in G. Step 2: Judge whether A saturated B, if it was, M is optima matching; soving process is over otherwise use the Hungarian agorithm Hungarian agorithm described beow: Step 1: Choose any matching of G: Step 2: If M fixed a of point, M is the optima matching for asked Otherwise, take an unsaturated point M in X as μ,make S = { μ }. Step 3: If N(s) = J,said it is no match in G to saturated a X vertices, stop ooking, any take a point as Y inn (s)-j. Step 4: If Y is saturated to M, take hypothesis that y μ M, use S { μ} instead of S,J {y} instead of J, turn to step3. Otherwise, takep as an augmented path from μ to y in M, use M = M P instead M, turn to step

5 FILLING KNOWLEDGE GAP After above anaysis, et us ook at if we want to fi the knowedge gap, what cost we need to spend on. We wi use cost-profit function in the anaysis process. Cost anaysis: Directy goas of enterprise are usuay getting economic interest. When they meet the market opportunities, the vast maority of cases wi choose their own revenue maximization way of transaction, of course is no exception in the fiing process. Knowedge spiovers need to measure profits to decide whether to carry on the knowedge transfer and knowedge earners wi measure the earning cost to decide whether or not to go on. The production function can be expressed as: Q = f (x 1, x 2,, x n ), (x 1, x 2,, x n ) can be understood as production factors, especiay the knowedge eements. If market price of the spiover knowedge is P, then knowedge transfer benefit is R = P f (x 1, x 2,,x n ). The cost to fi knowedge gap incudes: Res. J. App. Sci. Eng. Techno., 5(14): , 2013 Knowedge searching cost C 1 : It is usuay difficut to get knowedge source and price for innovation activities required. So it needs to be active in the market to search for. Obviousy, for the present popuarization of the network technoogy and the diversity of information, this cost is ower than before. Knowedge osing cost C 2 : In the knowedge transfer process, not 100% is success. Because of the wiingness and abiity of spiovers are ikey to cause the oss of knowedge transfer, produce oss cost. Learning abiity and wiingness of earners wi ead to the same resut. Knowedge earning cost C 3 : For knowedge earners, knowedge (especiay tacit knowedge) absorption is not ony rey on their own knowedge stock but aso need to put in some cost ike time, person materia and financia resources, we ca it knowedge earning cost. Knowedge transaction cost C 4 : Due to the infuence of opportunism, earners are not sure about if the opposite exaggerate the vaue and eve of knowedge and knowedge spiovers worry about reseing or abusing knowedge by opposite. These factors wi make both parties of knowedge transaction high cost, incude: negotiation, contract signing, the performance of the contract and the supervisory cost, etc. Sometimes, exorbitant transaction cost wi be obstaces to knowedge transfer. In VIC, both parties trade in "Virtua" 3814 space and may have never met, so trust pays a very big roe. Technica cost C 5 : Knowedge transfer must rey on certain media, the anguage is the foundation of communication between individuas. In addition, modern communication technoogy makes the wide appication of the transmission of knowedge wider and more rapidy. The main infuence factors are communication technoogy of eve, advanced equipments and technoogy. Besides the cost factors, the price of knowedge is aso by the time factor infuence. In a certain time scaes, there are three ways to fi their knowedge gap for most enterprises (i.e., knowedge transfer way): autonomous earning, knowedge transaction and estabish cooperation. In the next, we have anaysis on the three ways one by one. Autonomous earning: Beong to enterprise interna knowedge transfer way. They fi knowedge gap by autonomous earning. In this case, the enterprise don t need knowedge transfer, but ony rey on interna departments and search for required knowedge resources between team, which C 1 is very ow. And because of communication and cooperation smoothy among interna teams, C 2 is ow. Entirey depend on their own, enterprise requires a ot of human, materia and financia resources to the innovation activities and therefore, C 3 is high. Due to no knowedge transactions, C 4 wi be zero. And because the knowedge in the enterprise interna for exchange and sharing, technica factors on the infuence wi aso be very imited, which C 5 wi be very ow. But ust depend on their own strength, it wi take a ong time reativey, uness the enterprise can accompish anticipated target in short time by its own strength, there are few enterprises to choose this way. Knowedge transaction: Because of the particuarity of knowedge transaction, this study anayzed it separatey. In the market, through technoogy trading or merger and acquisitions, enterprises purchase knowedge directy. Because it is hard to measure the existence and vaue of knowedge, in this way C 4 wi be very high. In addition, knowedge spiover and earning abiity, gap in knowedge stock and structure in knowedge transfer activities among different organizationa that a wi get C 1 and C 2 high. C 3 Depends on the eve of knowedge transfer and the abiity of

6 Res. J. App. Sci. Eng. Techno., 5(14): , 2013 Tabe 3: Knowedge transfer cost and time factor ist Knowedge transfer ways C 1 C 2 C 3 C 4 C 5 t Autonomous earning Very ow Low High None Low Long Knowedge transaction High High Uncertainy High Uncertainy Uncertainy Estabishes the cooperation Low Low Lower Higher Low Short Fig. 6: Knowedge gap remedy way choice knowedge earners to determine. If knowedge gap is sma, C 3 wi be ow, otherwise wi high. On the other hand, if knowedge is purchase directy,t (the time to fi knowedge gap) wi short, or conversey. Such as different medium and estabishment choice of communication wi ead C 5 to change. Estabish cooperation: The premise of knowedge transfer activities in VIC members is to estabish cooperation and cooperation reationship based on trust. VIC information patform wi hep enterprises to choose partners, estabish cooperation such as virtua enterprise. It wi internaize the externa knowedge transaction, so C 1 wi be ower. Generay speaking, access, exit and credit evauation system of VIC make members to buid trust in a short time and a above ensuring smooth progress of the knowedge transfer, so C 2 is ow. Due to the trust and cooperation reationship, C 3 is aso ower. But to C 4, because of opportunism, it wi be high. Most of enterprises cooperation rey on computer network, so C 5 wi be ow. It is worth noting that, this way usuay spends shorter time than autonomous earning, which shown in Tabe 3. Choice of make up ways: In this study, we construct seection mode from time and cost dimensions, as shown in Fig t'= Time threshod: t > t' means enterprise can not withstand the time to fi knowedge gap, so they wi do nothing. Ony when t > t' enterprise chooses the way to fi knowedge gap based on anaysis of the cost. When t 1 <t<tt 1 and cost scae is in M 1 <M<MM 1, this means the enterprise can accept a ong time but ower cost way to fi knowedge gap. Usuay, this kind of enterprise reativey has rich knowedge resources and strong abiity to earn themseves, so most of them choose the way of autonomous earning by interna knowedge transfer. When t 2 <t<tt 2 and cost scae is in M 2 <M<MM 2, this means the enterprise can accept moderate time scae and cost to fi knowedge gap. If enterprise do not has enough knowedge stock to do innovation activities and want to fi gap in a short time, they may be wiing to pay higher cost and get knowedge transaction. Due to the opportunism, they must be carefu to seect subects for the dea. When t 3 <t<tt 3,and cost in M 3 <M<MM 3, this means the enterprises want to fi gap in a short time, but they wi not afford very high cost. Therefore, estabishing the cooperation for innovation is their preferred way. This wi not ony hep to sharing and compementary knowedge resources, but aso reduce the risk of innovation.

7 Res. J. App. Sci. Eng. Techno., 5(14): , 2013 The scae of t and M mainy rey on subective estimate of enterprise itsef, it may be different because of different enterprises. When scae of t or M is overapping, means that they can aso choose two or more ways to finish the fiing process. CONCLUSION Combined with VIC characteristics, this study discussed the initia stage of knowedge transferrecognition and choice fiing way for knowedge gap and the resuts are as foows: Based on Knowedge Management Theory, knowedge gap is divided into three types, respectivey is: core knowedge gap, advanced knowedge gap and innovation knowedge gap. This study designed recognition process of knowedge gap from endogenous and exogenous factors and had respectivey detai anaysis on both knowedge dimand and suppy. In addition, this study used Bipartite Graph Theory to match knowedge gap between two sides. After recognized knowedge gap, in this study, how to choose the way to fi knowedge gap was studied. The cost of fiing was anayzed and had 5 costs: Knowedge searching cost, Knowedge osing cost, Knowedge earning cost, Knowedge transaction cost and Technica cost. In this study, we construct seection mode from time and cost dimensions and discussed enterprise s choice strategy on how to fi knowedge gap. ACKNOWLEDGMENT As an author, I wish to thank the hepfu comments and suggestions from my boss and coeagues. This study is aso supported by the Nationa Natura Science Foundation of China and REFERENCES Du, J. and W. Jiang, Anaysis on the mechanism of knowedge stock growth. Sci. Sci. Manag. S&T, No. 1: Griiches, Z., R&D Patents and Productivity. University of Chicago Press, Chicago, pp: Haider, S., Organization knowedge gaps: Concept and impications. Creating, Sharing and Transferring Knowedge: The Roe of Geography, Institutions, Copenhagen, Demark, pp: Michae, H.Z., Deveoping a knowedge strategy. Caifornia Manag. Rev., 41(3): Moina, A., S. Pongta and C.F. Bremer, Framework for goba virtua business. Agi. Gob. Compet., 2(3): Moina, A., C.F. Bremer and W. Eversheim, Achiecing critica mass: A goba research network in system engineering. Foresight, 3(1): Wieser, M., Virtua high tech custers -the modern siicon vaey. Comp. Supp. Cooper. Work Design, No.9: Wei, J., Industria Custer: Innovation System and Technoogica Learning. Science Press, Beiing, pp: Yin, J. and W. Kaiya, Graph Theory and its Agorithm. China Science and Technoogy University Press, Anhui, pp: