Knowledge Management as An Innovation Strategy: Knowledge Management In The Context Of Manufacturing and Service Industry

Abstract

Knowledge management (KM) has become an important strategic tool for innovation, but the way it is applied and its effect is differential between manufacturing and service industries is not well understood. This paper provides an examination of KM as an innovation strategy through the lens of understanding how KM processes – creation, storage, sharing, application and transfer - drive innovation outcomes in manufacturing and service settings. The study draws on the knowledge-based view (KBV) and the SECI model to highlight some of the critical research gaps, such as the lack of comparative cross-industry studies, the underexplored intervening role of innovation between KM and organizational performance, and limited incorporation of digital era enablers like AI and Industry 4.0 technologies. The paper presents a systematic literature review and a comparative analysis which leads to the conclusion that the primary applications of KM are process innovation and operational innovation in manufacturing companies, while customer-centric and service innovation are the main applications of KM in service companies. These investments have become strategic in today's world as the KM software market is expected to grow to USD 74.22 billion by 2034 from USD 20.15 billion in 2024. The results not only advance the theory but also enable better guidance to organizations on how they can use KM as one of the competitive assets in the digital economy.