Generally, research into knowledge creation at the group level focuses on knowledge development and conversion, and argues for a close relationship between individual and organizational learning [ 13 ].
Studies on knowledge creation at the organizational level have suggested that we have at least two perspectives to understand the process of knowledge creation in organizations: the internal view and the ecosystem view [ 14 ]. Research studies that focused on the internal view emphasized that new knowledge begins with intuitive metaphors that link contradictory concepts [ 15 ], and may be created when prior knowledge is shared and transferred among members of an organization [ 16 ]. Thus, the internal view highlighted the crucial role of the creative and absorptive capacity of individuals within the organization [ 17 ].
Researchers that focused on the ecosystem view argued that a singular organization is embedded in an ecosystem [ 14 ], and much knowledge creation happens between organizations or industries, or by networks of organizations including suppliers, users, competitors, universities, public research centers, etc. Firms have increasingly co-created knowledge with external stakeholders during the innovation process to expand their knowledge base [ 20 ], and interorganizational learning is the key to the accomplishment of knowledge co-creation process [ 8 ]. Thus, our work will focus only on the internal dimension of knowledge creation.
Regarding research studies from the internal perspective, the SECI model, which defines KCP as a spiral process of socialization, externalization, combination, and internalization, developed by Nonaka and Takeuchi is the most widely used model for analyzing knowledge creation [ 21 ]. Focusing on the conversion between tacit and explicit knowledge, this model divides knowledge creation into the processes of socialization, externalization, combination, and internalization, suggesting that businesses should promote conversion between their tacit and explicit knowledge to foster their innovation and development [ 16 , 21 ].
The SECI model defines the ranges of tacit and explicit knowledge to identify the mechanisms underlying knowledge creation.
Explicit knowledge refers to knowledge that can be articulated using formal and systematic language and shared in the form of statistics, scientific formulae, specifications, and manuals [ 22 , 23 ]. It can be readily processed, communicated, and stored. Tacit knowledge is highly personal and difficult to codify and communicate; it is acquired through experience. Moreover, such knowledge is disseminated through activities under certain conditions and locations; acquired through observation, imitation, and practice; communicated through apprentice training and face-to-face interaction; and transferred through the movement of individuals between organizations [ 23 ].
Subjective perception, intuition, and instinct are encompassed by tacit knowledge [ 24 , 25 ]. The SECI model of knowledge creation is illustrated as follows. Socialization refers to the conversion between and the dissemination of tacit and explicit knowledge within an organization i. Externalization is the conversion of tacit knowledge to explicit knowledge or the articulation of tacit knowledge into explicit concepts; it is the essence of knowledge creation that involves using metaphors, analogy, concepts, hypotheses, or models to explicate tacit knowledge [ 24 ].
Combination is the conversion from explicit to tacit knowledge or the organization of concepts into a knowledge system [ 24 ].
Organizational knowledge creation
This process occurs primarily through formal education and training. Internationalization is the conversion from explicit to tacit knowledge or the embodiment of explicit knowledge into tacit knowledge [ 25 ]. Among numerous classifications of innovations, one of the most commonly accepted is that of the OECD Organization for Economic Co-operation and Development in the Oslo Manual [ 26 ], which distinguishes four types of innovation: process, product, marketing, and organizational [ 27 ]. Technological innovation involves process and product innovations, whereas non-technological innovation involves marketing and organizational innovations [ 26 ].
This paper focuses on the two types of innovation that the OECD considered technological. Depending on its novelty, a product innovation can be either incremental or radical. Incremental innovation refers to a product with slightly altered technology, functionality, and appearance, whereas radical innovation refers to a product characterized by thorough, innovative, and distinct technical alterations [ 28 ].
The second, technological innovation capability for process Process IC , is the ability to improve product or work processes through technical advances [ 29 ]. For businesses, knowledge is fundamental for undertaking technological innovation, expanding the scope of knowledge integration, and improving the ability to create knowledge; this is because knowledge contributes significantly to the improvement and technical level of products [ 30 ].
The existence of a business depends on whether it can efficiently create, apply, and commercialize knowledge related to technologies and markets [ 31 ].
Knowledge creation can be seen as explicating the knowledge of individuals in an organization into group knowledge. Therefore, knowledge creation at the individual level underpins that at the organizational level; exchanging and sharing knowledge within an organization promotes the explication, transmission, and integration of tacit knowledge within the organization. These processes internalize newly created knowledge in individual employees, thereby completing the cycle of knowledge creation [ 11 , 21 ].
From the perspective of knowledge stock, a business capable of creating knowledge can constantly generate the knowledge resources required to upgrade its processes and products [ 20 , 32 ]. This is particularly true in increasingly competitive industries, where businesses that exchange and integrate knowledge more frequently and are more capable of knowledge creation are more efficient at research and development, as well as innovating their products more effectively [ 33 ].
On this basis, we proposed the following two hypotheses:. Numerous studies have suggested that knowledge creation is essential to businesses gaining a SCA [ 24 , 36 ]. Therefore, businesses with greater means to acquire knowledge and a greater ability to integrate and create knowledge are more efficient at identifying and responding to rapid changes in the market and resolving the limitations of their knowledge resources to outclass rivals [ 36 ].
The Spiral of Knowledge
On this basis, knowledge creation plays a crucial role in enhancing a SCA [ 38 ]. Knowledge creation can be seen as a process through which knowledge is constantly transferred and integrated among businesses, functional departments, and individuals, or a process involving repeated conversions of tacit and explicit knowledge [ 21 , 25 ]. This process leads to new knowledge resources, which include new approaches to solving problems and boosting performance, new work methods, new products, new concepts, and new lines of thinking [ 39 ]. These knowledge resources enable a company to improve its efficiency, reduce its costs, or refine its products.
Through this, the company improves its ability to create value for its customers, serve customer needs, and increase employee and customer satisfaction [ 38 ], thereby developing a competitive edge [ 40 ]. On this basis, we proposed the following hypothesis:. Researchers have argued that a business that is unable to continually innovate cannot operate in an increasingly competitive market, and will consequently lose its competitive advantage [ 41 ].
Additionally, with the growing penetration of big data and the Internet, knowledge is rapidly and frequently being replaced and updated; changes and developments occur every day, and business operators should constantly formulate or refine strategies to develop products or services and acquire and maintain a competitive edge [ 38 ]. From the perspective of target markets, technological innovation allows a business to satisfy not only customer needs for its existing products and services, but also new customer needs.
Moreover, businesses that are highly capable of technological innovation are more likely to push beyond the boundaries of their capabilities and markets to identify new markets and capture the opportunities that they afford [ 40 ]. From the perspective of business models, such businesses tend to enter unfamiliar domains to create and commercialize products; the services that they postulate are groundbreaking, and the businesses pilot and promote them in existing markets [ 43 ].
Reducing costs, exploring opportunities in new markets, and providing new products or services are all outcomes of SCAs.
The Knowledge-Creating Company
Process innovation was demonstrated to exert a significant direct influence on product innovation [ 27 ]. For example, the efficiency and quality of product innovation can be further improved by implementing product development in an integrated rather than stage-gate manner. Thus, we believe that process innovation capability is positively related to product innovation capability.
The conceptual model of this research is shown in Figure 1. To verify the hypotheses, we applied a questionnaire survey to collect data. Since the technological innovations are actually deployed in manufacturing industries, manufacturing firms in China were chosen as the research setting. China is a vast country that encompasses a wide range of regions. Different regions have different cultures, government policies, and locational conditions.
In order to reduce the influences of these situational factors on the research results, we strategically selected a typical manufacturing region representing the new economic development stage in China, which is the Pearl River Delta in southern China. The survey was carried out between 1 July and 30 November The research participants were employees in firms in the industries of communication and computer-related equipment, electrical machinery and equipment, machinery and engineering, instruments and related products, metal products, and so on.
The data collection procedure included three phases.
Firstly, we developed the original English questionnaire based on previous studies, and translated it into Chinese using collaborative and iterative translation. Three management scholars with rich research experience in the knowledge and innovation management research field translated the questionnaire into Chinese. Then, we implemented two preliminary assessments to refine the item wording of the Chinese questionnaire.
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Three manufacturing managers and three professors reviewed the pre-questionnaire, and resolved any unfamiliar or unclear wording to improve clarity and identify. Next, we conducted a pre-test in six manufacturing firms. Based on the feedback, we detected any possible misunderstandings caused by the translation and further modified the questionnaire to make sure that the questionnaire was understandable and relevant to practices in China. Secondly, we selected firms randomly from a list of manufacturing firms provided by the science and technology service departments of local government as our sampling frame.
Introduction to Development of Knowledge Creation Design Technology
Following the suggestion of Frohlich [ 44 ], selected firms were contacted in advance to identify the key respondents. Thirdly, email or online surveys were sent out to the respondents with a cover letter that briefly introduced the objective, outlined the study, and ensured confidentiality. In total, questionnaires were collected.
After deleting the responses with missing data, we received valid questionnaires, yielding an effective response rate of The detailed characteristics of sampled firms are shown in Table 1 , indicating a wide variety of sizes and industries.