It's no secret that the competitiveness of business is being transformed by globalisation.

Globalisation has meant greater mobility of capital, easier and faster access to product and market trends and information and increased transparency of the latest technologies and product and service developments anywhere around the world.

Traditional resources that have been critical to competitiveness in the past – capital, raw materials, machinery, local markets, relatively low cost labour – are now less important. While, other resources and capabilities have become absolutely central to business competitiveness – like knowledge, the capacity to innovate and problem-solve, running nimble and flexible operations and being first to market.

In an age of globalisation, the relative value of knowledge as a strategic resource has increased.

Knowledge lies at the intersection of many of the forces that characterise the new business environment. It contributes decisively to competitive advantage, especially when taking on global competitors. It can help enterprises respond to many of the challenges of making organisations leaner, flatter and more flexible. It fosters new strategic alliances and improves their likelihood of success. It can enable organisations to get the most out of high talent workforces. And, it capitalises on the effective and creative use of advances in modern information and communication technologies.

The logical conclusion of this analysis is that enterprises that manage organisational and individual knowledge well will deal best with the challenges of the new business environment.

At least, this is the thesis being explored by Dr Richard Hall of the University of Sydney's Australian Centre for Industrial Relations Research & Training in a research study commissioned by the Australian Business Foundation.

This study asks the questions:

• How do organisations use knowledge to gain competitive advantage?
• How well equipped are Australian organisations?
• What are the lessons for small and medium sized enterprises and the implications for business leadership?
• Let me give you a preview of what's emerging from this study into business competitiveness and the management of knowledge in a sample of key Australian firms:
• There is a tight relationship between business objectives and knowledge management strategies.
• Future competitiveness cannot be assured through improved technology, equipment or infrastructure, but only through better deployment of people and processes.
• Knowledge management is therefore not about IT systems, but about building stronger relationships and knowledge flows among key staff and between key staff and suppliers, customers, and other clients.

Knowledge management contributes to competitiveness in the following key ways:

• providing a better understanding of the business environment and the needs, preferences and business processes of customers and end users;
• supporting stronger strategic relationships with suppliers;
• helping companies to enhance their position as leaders in their field, as innovators attuned to emerging trends and new developments;
• achieving continuous improvements in costs, quality and timeliness of products and services; and
• retaining key employees and their knowledge within the business.

ACIRRT's findings lead us to some fresh insights to substantiate the cliché that people are the most important asset of a business.

Effective knowledge management is predicated on a workplace culture that fosters knowledge-sharing and problem-solving, a high degree of trust and mutual support, a preparedness to seek out and proffer solutions and suggestions and a genuine commitment to both individual and organisational learning.

The distinct impression emerging from this study is that knowledge management is no mere management fad or specialist program. High performing businesses view it as a tool of trade. Knowledge and how it is used is "mission critical" in the constant search for new ways to create value and to move enterprises higher up the global "food chain".