14. What are the Core Principles of Knowledge Innovation?

There are five core concepts that distinguish knowledge innovation from other knowledge and innovation approaches:

• Innovation Value System (not value chain) - value chain thinking is linear and static. The innovation value system is dynamic and shows all the interdependent relationships that are need to be developed for successful innovation.

• Strategic Business Network (not Strategic Business Units) - strategic business unit management tends to create isolated islands of knowledge. The Strategic Business Network encourages the flow of knowledge between partners, customers, suppliers, research organisations and other stakeholders, including competitors, in the innovation process.

• Collaborative (not Competitive) Advantage - Competitive strategies create win-lose scenarios, often competing for a share of the same pie. Collaborative strategies encourage win-win situations through symbiotic relationships. Knowledge grows and the pie gets bigger for all.

• Customer Success (not Satisfaction) - Customer satisfaction meets today's articulated need. A focus on the success of your customer helps identify those future unarticulated needs, the source of growth and future success.

15. What is the difference between Knowledge Management and Knowledge Innovation?

Knowledge management is now widely practiced. But much of this practice is based on "sharing what we know", such as best practice. More forward looking companies are developing the role of knowledge in their innovation processes. This is where future success will come. It goes beyond the 5 or 10 per cent year-on-year continuous improvements from sharing existing knowledge but the 10 fold and even 100 fold breakthroughs from innovation. Effective knowledge management is a necessary prerequisite. Knowledge innovation is one further step on the management performance trajectory, that integrates knowledge management with innovation management.

16. Power of Innovation – the Case of Skandia

For the past five years Skandia has been describing its work surrounding intellectual capital in supplements to the group's financial reports. The components which make up intellectual capital, including innovation capital, were presented in the supplement to the 1995 Annual Report.

Innovation capital refers to the explicit, packaged result of innovation, in the form of protected commercial rights, intellectual property, and other intangible assets and values. Harnessing this power of innovation requires a more dynamic perspective and a synchronized focus on human and structural capital for renewal. Thus the power of innovation is found in the border zone between human capital and structural capital.

The goal is to achieve a multiplicative effect in order to enhance rapid knowledge sharing and develop new business applications. In doing so, new value is created. The critical success factor is not only the number of new ideas, but more so, their implementation. This can be facilitated by having the right company culture, leadership and infrastructure.

A company's strategies for growth, competence development and competence renewal can bear great significance for its future value. The power of innovation creates value in that innovation capital is either recycled or generated anew.

Knowledge innovation is the creation, evolution, exchange and application of new ideas into marketable goods and services, leading to the success of an enterprise, the vitality of a nation's economy and the advancement of society.