|
Issue |
Old Industrial Economy |
New Knowledge Economy |
|
Markets |
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|
Economic Development |
Steady and linear, quite predictable |
Volatile - extremely fast change, with explosive upsurges and sudden downturns, and chaotic – the direction of the economy's changes is not perfectly clear4 |
|
Market changes |
Slow and linear |
Fast and unpredictable |
|
Economy |
Supplier-driven |
Customer-driven |
|
Lifecycle of Products and Technologies |
Long |
Short |
|
Key Economy Drivers |
Large industrial firms |
Innovative entrepreneurial knowledge-based firms |
|
Scope of Competition |
Local |
Global hypercompetition |
|
Competition: Name of the Game |
Size: The big eats the small |
Speed: The fast eats the slow |
|
Marketing: Name of the Game |
Mass marketing |
Differentiation |
|
Enterprise |
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|
Pace of Business |
Slow |
Appreciably faster with ever-rising customer expectations |
|
Emphasis on |
Stability |
Change Management |
|
Business Development Approach |
Strategy pyramid: vision, mission, goals, action plans |
Opportunity-driven, dynamic strategy |
|
Success Measure |
Profit |
Market capitalization (the market price of an entire company) |
|
Organization of Production |
Mass production |
Flexible and lean production |
|
Key Drivers to Growth |
Capital |
People, knowledge, capabilities |
|
Key Sources of Innovation |
Research |
Research, systemic innovation, knowledge management, integration, new business creation, venture strategies, new business models |
|
Key Technology Drivers |
Automation and mechanization |
Information and communication technology, e-business, computerized design and manufacturing |
|
Main Sources of Competitive Advantage |
Access to raw materials, cheap labor, and capital for conversion; cost reduction through economies of scale |
Distinctive capabilities: institutional excellence, moving with speed; human resources, customer partnership; differentiation strategies; competitive strategies |
|
Scarce Resource |
Financial capital |
Human capital |
|
Decision Making |
Vertical |
Distributed |
|
Innovation Processes |
Periodic, linear |
Continuous, systemic innovation |
|
Production Focus |
Internal processes |
Enterprise-wide business process management and entire value chain |
|
Strategic Alliances with Other Firms |
Rare, "go alone" mindset |
Teaming up to add complementary resources |
|
Organizational Structures |
Hierarchical, bureaucratic, functional, pyramid structure |
Interconnected subsystems, flexible, devolved, employee empowerment, flat or networked structure |
|
Business Model |
Traditional: command-and-control |
New business model: refocused on people, knowledge, and coherence |
|
Work Force |
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Leadership |
Vertical |
Shared: employee empowerment & self-leadership |
|
Work force characteristics |
Mainly male, high proportion of semi-skilled or unskilled |
No gender bias; high proportion of graduates |
|
Skills |
Mono-skilled, standardized |
Multi-skilled, flexible |
|
Education Requirements |
A skill or a degree |
Continuous learning: It's not what you know, it's how fast you can learn |
|
Management-Employee Relations |
Confrontation |
Cooperation, teamwork |
|
Employment |
Stable |
Affected by market opportunity / risk factors |
|
Employees Seen as |
Expense |
Investment |
New Dimensions in Business Space