The nowadays economic environment could be characterized by economic volatility, high employee

turnover, global competition, and rapid change. A long-term competitive advantage for any country, industry, or
company, is now harder to obtain because of the fact that neither money nor technology can, for any length of time,
offset the growing imbalances in labor resources. Companies can no longer expect the products and practices that
made them successful in the past to keep them viable in the future. Nowadays knowledge is considered a key asset
which can provide a sustainable advantage. According to Davenport and Prusak: “Eventually competitors can almost
always match the quality and price of a market leaders’ current product or service. By the time that happens though,
the knowledge rich, knowledge-managing company will have moved on to a new level of quality, creativity, or
efficiency. The knowledge advantage is sustainable because it generates increasing returns and continuing
advantages. Unlike material assets, which decrease as they are used, knowledge assets increase with use: ideas breed
new ideas and shared knowledge stays with the giver while it enriches the receiver. The potential of new ideas
arising from the stock of knowledge in any firm is practically limitless – particularly if the people in the firm are
given opportunities to think, to learn, and to talk with another” [1].
The only real comparative advantage in developed economies lies in the implementation of the knowledge
management process. This means continual, systematic work on the productivity of knowledge and knowledge
workers, which is still neglected and abysmally low. It means that companies store and deliver information through
various systems and activities in order to make it available at the right time, in the right place and to the right
persons. Furthermore, it means identifying those employees that can be considered the company’s intellectual asset
and treat them as important components of the knowledge management process. The productivity of knowledge and
knowledge workers will not be the only competitive factor. It is, however, likely to become the decisive factor, at
least for most industries in the developed countries.
As a result, the modern business organization can’t compete effectively in the marketplace without skilled
managers and employees and without methods for managing their employees’ knowledge. Nor can it effectively
compete in the marketplace without implementing the “right” processes making use of the “right” technologies,
including information technology.