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Is tacit knowledge transfer another hype in the development community?

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Multilateral development banks put a lot of currency on knowledge sharing to spur innovation and help countries leapfrog development. At the same time, they find it quite difficult to capture and share tacit knowledge from operations in a practical manner.

As part of its long-term strategic framework, the Asian Development Bank has identified knowledge solutions as one of the core drivers of change to stimulate growth and to broaden and deepen the impact of development programs.

In the development world, communities of practice are informal voluntary groups formed among peers who share their experiences, expertise, and lessons on particular issues. ADB took it one step further by institutionalizing 15 sector and thematic groups, giving them formal mandates and resources to capture and share tacit knowledge from ADB’s operations and to promote more holistic approaches to developmental challenges we face today.

Many of our peers in the MDB community are, however, questioning the effectiveness of knowledge activities to capture and share development knowhow to generate embodied knowledge and achieve better development results. How do we know that knowledge transfer has taken place? How do we improve the process if we do not have clear understanding of what works and what does not? How do we then justify spending time and resources to capture and share tacit knowledge to help recipient country officials make better decisions and take effective action?

At the same time, our MDB peers increasingly recognize that complex and persistent problems that commonly burden developing countries  — for example, poverty, inequality, and climate change — require more holistic approaches embedded in localized policies, projects, and programs. That is why MDBs are hyped about tacit knowledge transfer and emphasize the importance of working closely together with recipient country officials to understand their knowledge needs.

Dealing with tacit knowledge

By its definition, tacit knowledge is something that cannot be fully captured by written documents, video-recording, and/or simulations because it is not easy to express. Yet it is important for replication, which leads to innovation. This point can easily be illustrated by our own personal experience with learning how to cook. Knowledge and knowhow are often captured through written instructions: the cookbook. Following instructions however does not produce consistent outcomes: not all knowledge is captured by the cookbook, and there is tacit knowledge that needs to be shared.

Cooking shows complement the cookbook by letting you watch and imitate the expert: the master chef. Some would even go one step further by creating a robot that simulates the motions of the chef with detailed programming that consistently reproduces the dish. So now we may pat our backs that we have captured the tacit knowledge.

Then what about the actual transfer of tacit knowledge to generate embodied knowledge? Simply following instructions, regardless of the modality, cannot be an evidence of tacit knowledge transfer, not to mention embodied knowledge, to say that someone has reached a level of proficiency that enables them to consistently replicate and innovate.

Recipe for success

Let’s go back to the learning how to cook example. In Asia – and many other parts of the world – popular TV shows are centered around chefs transferring tacit knowledge to a group of willing learners, often celebrities. The underlying purpose is clear, such as helping a growing number of singletons to cook for themselves or preserving a traditional way of cooking. Notice that these shows provide the same learning environment and ingredients for the participants.

The results are quite shocking at the beginning: the dishes prepared by the learners, regardless of them being a novice or expert, would taste different despite the same instructions, ingredients, and cookware. In succeeding episodes, the discrepancies in the dishes would decline. Then they would localize their learnings in their own home setting applying their understanding of transferred tacit knowledge. They may even reach a point creating new dishes for themselves, families, and friends, demonstrating the true embodiment of transferred tacit knowledge.

Facilitating knowledge transfer

What are the underlying implications of this example? To transfer tacit knowledge to a point where it actually gets embodied by someone, regardless of the person being a novice or an expert, would require repeated face-to-face interactions between those seeking knowledge (seeker) and those who can provide them (provider).

Even so the following preconditions must be met for effective and successful tacit knowledge transfer to take place:

  • There should be a clear purpose: a need to learn.
  • There should be a willing knowledge seeker and provider.
  • There must be mutual trust and respect between the two.
  • Both must be able to communicate well to each other.

If we are to promote the transfer of tacit knowledge systematically in the development community, we must begin by connecting those seeking solutions with willing experts so they can find practical solutions together. The rest of the recipe would have to be improvised based on the needs of the knowledge seeker and availability of knowledge providers and with repeated interactions supported by the time and resources of a benevolent intermediary: MDBs. 

Harnessing digital platforms

MDBs support capacity-building activities, such as workshops and seminars, which provide opportunities for face-to-face interactions between those seeking solutions and experts. They measure the intensity and effectiveness of knowledge transfer with proxy indicators and anecdotal evidence through surveys of participants.

There is, however, no guarantee that these activities generate embodied knowledge and achieve better development results. Skeptics would even say that simply providing an opportunity for seekers and providers to interact with each other, with the hope of subsequent repeated interactions between the two, does not provide strong justifications for spending scarce time and resources just to provide such opportunities.   

What if we can provide standing opportunities for seekers to interact with the right providers, not bounded by time and space?

MDBs such as ADB are looking at digital platforms, such as websites and online communities, which offer easier and yet sure ways to connect knowledge seekers and providers while broadening the dissemination of development knowhow.

Knowledge seekers are assured of the quality and reliability of the advice and solutions as these are curated by a trusted mediator. Experts can quickly provide practical policy advice and share best practices and lessons. Once connected, they may decide to work closely with each other to find localized solutions through repeated face-to-face interaction.

With such an approach, time and resources spent on transferring tacit knowledge are not wasted. It would have a higher probability of connecting those seeking solutions to the right experts and peers at the right time – finding the right people when one needs them.  

To overcome the challenges we face today and move rapidly towards achieving the Sustainable Development Goals, knowledge collaboration among practitioners, policymakers, civil society and experts is the very founding block for ‘Finding Solutions Together.’ And one must not hesitate to share their experiences, knowhow, and lessons through trusted and willing mediators: the MDBs.

ADB

Communications Specialist, (Knowledge Management), Knowledge Support Division (DCKD), Department of Communications (DOC) ADB

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Economy

Inflation and Economic Crisis in Pakistan

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Cooperation on International level to protect economy and financial markets is a good development, but in our country with sealed borders amid the killer virus fatalities, economy and financial market is in deep crisis. Prime Minister and his team are taking different measures ranging from domestic to international level, to win the war against the COVID-19 disease, but the fear and consternation forced investors to confine themselves to a limited investment in government and private sectors. Recently, government declared a state of emergency which again left adverse impacts on supply chain and flow of goods. Due to emergency, most companies and businesses are operating from home, but they are in deep financial crisis. All the Businesses across the country are badly affected including travel Industry. While crisis deepen, investors choose different way to save their investment.

The development of society depends on its needs. For this, there are some rules and regulations in every society that inculcate citizens to follow these rules and the way a country developed. From the borders of the country to the point of view, every person is tied to the chain of economics. The chains of this chain are so deep that every moment from the universe to the bedside they are interconnected. Every need of the world is related to money and the value of money depends on export and financial market’s fluctuation. For example, the value of dollar is converted into many rupees in Asia shows that where the currency stands against the dollar.

The source of inflation on a daily basis and the source of human identity, determines quality of life. The maturity of the foundation is seen revolving around the economic activities of individuals. There are many important points to influence individual forces and social decisions. But there are problems in the destinations when they are difficult to travel. Such destinations are always full of thorns. The jatts of the destination make the paths easy or difficult. It is possible for any community or regional head to rise only when its economic action is spoken of social values.

If the principles are made, Europe has adopted social and economic principles to further its agenda, and even we can say that they are following the streak what Islam suggested. If our state is talking about madina state, then it can be learned as a matter of fact, then the social patches can be straightforward, but the actions were considered to be very straightforward. It is known to be done. The life of the world is always a matter of humility, politicians are one of his inventions, and human being is not only a human being, but also the principle of compassion is also learned. The principle of humility is also one of those who make humans humble with humans. The principles of a human being become the destiny of an area.

The last several years of Pakistan’s economy were regarded as highly inflationary periods due to its political instability. Inflation has been the major obstacles in the way of development since years. The inflation adversely affected the country economic growth and financial sector development. Since the last six months, Pakistan received $8 billion in grants and loans from Saudi Arabia, the United Arab Emirates and China, but cannot be termed as the whole panacea for its financial and economic diseases. We need more help and more progress to stabilise our economy. International fuel prices have also cause inflation. The inflation hike is mainly due to the increasing prices of fuel and food, according to a PBS statement. The country GDP growth would remain close to 2.5% because of slowdown specifically in large scale manufacturing and agriculture sectors. According to macrotrends, the year 2018 average the inflation was 5.8%, which was quite low this year. If the average inflation of the budget 2016-17 was 4.1%, then the average inflation rate of 2017-18 was 2.9%. The rate of the year was 7.0%. According to the 2018- year of March 2019, inflation is 9.4% at the record level. According to the Pakistan bureau of statistics, the measurement of mingi is distributed to groups. In this group, cpi (consumer price index) includes nfne non-food and non-energy items. Oil, petrol, diesel, CNG, electricity and natural gas Inclusive. Their rates were recorded at 5.6% in July 2017-18 and 7.6% in 2018-19.But in the year 2017-18, the average rate was recorded 5.6% and the average rate of 2018-19 was 8.1% extra. After that, the effects of inflation were seen by dividing people into five groups in terms of income.

The first group was 8000-12000, which was 2.7% in 2017-18 and 4.9% in the year 2018-19. The second group is 8000-12000, which is 3.0% in the year 2018-19 in the year 2017-18. The third group was 12000-18000, which faced 3.1% in the year 2017-18 and 5.5% in the year 2018-19. What is the salary group? The fourth group is considered as a salary class, it has experienced an average rate of inflation in the year 2017-18 at 3.3% and 6.6% in the year 2018-19. In the end, more than 35,000 people included in the year 2017-18, who did not tolerate the rate of inflation from 4.4% in the year 2018-19 and 8.4% in the year 2018-19.

 If the annual average is taken out, 3.8% in the year 2017-18 and 7.0% in 2018-19. After that, if the wpi (wholesale price index) wholesale goods are spoken, the agricultural forestry and fish industry 7.4% in ores and minerals 14.31%, the clothing industry 13.79%, leather 33.07%, metal machinery 6.70%, and 21.15% in the transport goods were increased. The record was behind the inflation, the imf went to the previous government or the current government’s wrong policies. In the past sixty years, 6000 billion Pakistani rupees were one million twenty thousand, but in these two bells, one million sixty Thousands will be born. The current government has raised 11 thousand billion loans in different deal forms.

Every day in 2013, the PPP has taken 5 billion rupees every day, 2018 Muslim league-nawaz has spent 25 billion rupees every day. The poor people of Pakistan are considered to be the winners. From the people of the country, the thinking of government houses starts from home and ends in the end of the house. Because the nation in which the forgiveness of the dead is the prayer of the mpa of the area If you do not know what you’re looking for, then you will be able to get rid of it. If you do not know what you’re looking for, then you will be able to get rid of it. If you do not know what you’re looking for, then you will be able to get rid of it. The swords of doubts hang. Recognize the inner… economic and social values will be the dust of your feet…

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Economy

COVID-19 cruelly highlights inequalities and threatens to deepen them

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In many countries, income inequality has risen steeply since the 1980s, with adverse social and economic consequences. The COVID-19 pandemic now cruelly highlights those inequalities – from catching the virus, to staying alive, to coping with its dramatic economic consequences.

Some groups, such as migrant workers and workers in the informal economy, are particularly affected by the economic consequences of the virus. And women, who are over-represented in the public health sector, are particularly exposed.

High levels of poverty, informality and unprotected jobs also make it more difficult to contain the virus.

Policy responses must ensure that support reaches the workers and enterprises who need it most, including low-wage workers, small and medium enterprises, the self-employed and the many other vulnerable people. 

Everyone is at risk

While some workers can reduce their exposure to the risk of contagion by teleworking from home, or benefitting from preventive measures, many cannot because of pre-existing inequalities.

Across the world, 2 billion workers (61.2 per cent of the world’s employed population) are in informal employment. They are more likely to face higher exposure to health and safety risks without appropriate protection, such as masks or hand disinfectants. Many also live in cramped housing, sometimes without running water.

This not only exposes these workers to health risks, it also makes preventive measures for the wider population less effective.

Getting sick means becoming even poorer

Inequalities also play out cruelly in what happens to people when they catch the virus.

For some it means going on sick leave, accessing health services and continuing to receive a salary.

But for those at the bottom of the income chain it’s a catastrophic scenario. Many are not covered by health insurance and face a higher risk of mortality. They may not even have access to health services.

Even if they ultimately recover, the absence of income replacement benefits means that they can become even poorer. Every year, an estimated 100 million people fall into poverty as a result of catastrophic health expenses.

The “work or lose your income” dilemma

Governments and central banks have adopted large-scale measures to save jobs and enterprises, and provide workers with income support.

Unfortunately, not all workers or enterprises benefit from these measures.

For informal economy workers, reduced hours, due to the pandemic, means loss of income with no possibility of receiving unemployment benefits.

Informal micro and small enterprises that constitute 80 per cent of enterprises worldwide are generally out of reach of public policies.

Part-time workers, many of who are women, temporary workers, or workers under short-term contracts and in the digital gig economy are frequently not eligible for unemployment benefit or income support.

Many of them face the same “work or lose your income” dilemma as informal economy workers. To pay their food and other basic expenses they often continue to work until forced to stop by measures to limit contagion by the virus. This compounds the economic insecurity they already face.

We need equitable and inclusive policy responses

In adopting short-term responses to the crisis, urgent attention should be devoted to protecting low-income households.

This means income support measures broad enough to cover the most vulnerable workers and the enterprises that employ them.

Italy for example extended income support (80 per cent of the gross salary) to workers in enterprises with financial difficulties, to all economic sectors and to enterprises with less than 15 employees, which are normally not eligible. Lump-sum income compensation is also provided to the self-employed and external collaborators.

Spain is providing income support for the self-employed, members of cooperatives and workers whose employment has been temporarily suspended, even if they would not have normally received unemployment benefits.

In developing countries, informality and limited fiscal space add to the difficulties. However, income support could be extended through non-contributory social security schemes or existing cash transfer programs. Support could also be offered temporarily to informal enterprises.

ILO

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Economy

War economics

Giancarlo Elia Valori

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In 2019 – the last year for which we have complete statistics – all classes of financial investment had a total increase of 23 trillion US dollars, particularly Stock Exchange securities and public debt instruments. The global value of Stock Exchange securities alone grew by 17 trillion US dollars, from 67,000 to 84,000 US dollars, while, finally, the global value of bonds alone grew by 6 trillion US dollars.

 A very weak house of cards. In fact, two events alone, such as the closure of the Straits of Hormuz, or a new “democratization” in the Middle East, would be enough to trigger an inflation led by oil or other raw materials cost, which would bring the whole great house of cards of public and private debt down.

 A “short-term life”, an “altered stage” of finance that currently – with fintech and derivatives, born with Clinton’s banking reform – can afford not to consider the financial flows data, but only a manipulated calculation of probabilities, against which, however, you can insure yourself.

 The entire Eurozone, which believes to be smarter than the others, lives on trade surpluses – often huge as in Germany – but also with a mix of low domestic wages and booming foreign trade, which makes the EU economies extremely vulnerable to asymmetric attacks from some non-EU expanding countries – not to mention the USA and China, which will tolerate for a short time yet this difference in level, which harms them significantly.

 The European Target 2, the interbank payment system that no longer allows to resort to foreign currency reserves to offset banks’ liquidity deficits, has now a full balance of over 1 trillion euros, of which 800 billion euros are German flows only, which therefore live on purchases by the Euro area.

 Hence a system that amplifies the asymmetric shocks, which are inherent in a “rigid” currency and not lender of last resort as the euro, but which favours above all the holders of greater surpluses than the EU countries, which are currently less capable of achieving trade surpluses. Therefore, for Italy, beating the surplus within the Eurozone is a primary goal of economic and financial warfare. It can be done.

 Certainly Keynes’ old and still valid idea – launched at the Bretton Woods Conference – to find a single currency and also an account currency, namely bancor, which would revalue the currency of the country recording a surplus and devalue the country recording an excessive deficit, was defeated by the USA, the winning country, which had also financed Great Britain – that paid its debt to the USA until 1973 – but which wanted above all to internationalize the dollar, so that it could have a “high” value despite its structural trade deficit.

 Therefore, this enables the EU countries which record higher balance of payments surpluses to purchase bonds –  for example, Italian ones – while the further reduction in value of the Greek, Spanish and Portuguese bonds is maintained by favouring one or the other markets of government bonds and securities. Currently the shopping of public debt instruments is a primary method of economic warfare.

 In this very weakened framework, the huge Covid-19 pandemic broke out.

 It is the seal – if ever there was a need – of a new war economics.

 This means: a) initial planning of actions; b) predefined distribution of resources; c) hierarchy of goals; d) careful selection of public and private spending.

 Furthermore, democratic Socialism, but also social Catholicism, were born from the experiments that the great capitalist economies carried out during the First World War, such as the Beveridge Plan – a continuation of war Socialism by other means – just to paraphrase Von Clausewitz’s well-known statement – but also the subsequent democratization of Germany following the end of the Third Reich, which led the winners to maintain the workers’ co-participation in the management of small and large companies.

 When this health and human tragedy is over, we can think about a sort of new “Glorious Thirties”, as a French economist called the years from 1945 to 1975.

 Nevertheless, we shall give up what the Maoist Red Guards called the “four old habits”, i.e. old ideas, old culture, old habits and old behaviours.

 But obviously we shall do so within our eternal Western culture, which respects all the others and, often, enhances them.

 Old ideas: balancing the budget as a goal in itself. Let us consider that currently the EU Member States’ Constitutions enshrine precisely the “balanced budget” principle. It is a laughing matter. What should be done if Vesuvius erupted? Could we leave the whole Campania region without aid? What about Smith’s invisible hand?

What if a new pandemic broke out? What should be done? Are we not aware of the fact that probably also the current financial criteria may be undermined, not only by people’s demands, but precisely in their intrinsic structure?

 Old culture: what if we rethought all the finance and productive economy?

What if, for example, we rebuilt the internal market, without thinking – as it will never happen – that trade-induced capitalization will be such as to refinance the system? The mountains of money on which the global “billionaires” are sitting like Uncle Scrooge are not really cashable now, even if it seems so.

 Hence we are building a “Monopoly” that looks like a real system, but it is not so any longer.

 Old habits: what if we tried to control production so as to avoid – even manu military – companies’ delocalization abroad? What if we understood, for example, that a mechanic from the Piaggio company in Pontedera is not at all interchangeable with a poor Indian immigrant?

 Surely they will never make the same Vespa scooter. Hence, what if we invested not in the quick planned obsolescence – possibly with much advertising rhetoric – but in items capable of being a non-monetary investment for buyers?

 This is the theory of generalized wear – even in goods production – that Ezra Pound expressed in the 45th Canto of his most important work.

 However, there are no industrial nations by vocation or mission.

 Nevertheless, the shrinking of the Welfare State following the eventful advent of the so-called “Second Republic” in Italy has been based on the concept – which is very hard to prove scientifically – that the cost of market limitation is always greater than the cost of a restructuring crisis.

 This has never been the case, not even on a simple accounting level.

 Hence a war economics against the pandemic is needed to rebuild the old Welfare State with new formulas.

 The war economics, as it was studied after the Second World War, is made of many things: the economic “war cycles”, which absorb the Schumpeterian creative destruction; the calculation of the national income; the estimate of real capital and its depreciation, not to mention the input-output tables.

 There is an old study by the Naval War College, drafted by Jim Lacey in 2011, which tells how US economists probably determined the allies’ real victory in the war against the Axis powers.

 In 1931, a British intelligence cell supervised the German industrial reconstruction, while in the 1930s and 1940s, the economic experts – not the poor ideologists of the current tout va bien – identified the industrial sectors which had to be selectively funded, as a priority, to secure the victory and the war efforts.

 A cost-benefit analysis was made – not the ridiculous one that is currently so fashionable for infrastructure in Italy – but the one based on Leontief’s matrices.

 Preference for strategic bombing, for example, as well as for precision weapons and for surgical actions on convoys.

The battle of materials theorized by Ernst Jünger was made by the Allies, not by the Third Reich.

 Hence, in the current Covid-19 times, selective investment is needed in biological sciences and electronic infrastructure – all public investment, even if some private entities would have the possibility to invest in these fields – but also in technical and mass information, scientific training and all the new technologies.

 The private sector may currently have the capital to invest, but it has not the heads for it while, in the medium or long-term, the public sector can afford a return on non-financial investment and, in any case, lower than the one that a private investor in the same sector would expect.

 This is the reason why, based on my first-hand experience of that era, I can say it was silly to privatize IRI’s large product and business sectors.

 This is also the reason why energy is still mostly public in Italy, precisely because the capitalists in the sector would have been forced to – or would have anyway preferred – a “shorter” timeframe for the return on capital.

 As is the case with household appliances, cars and even computers. As often currently happens, they are homogeneous products, but selected by consumers on the basis of structurally non-efficient criteria such as colour, fashion, user-friendliness, advertising, etc.

 The next industrial revolution will be much less advertising-based than the current one. The market is already rather updated and selective.

 The Washington Consensus is also over. Disciplined fiscal policy is not necessary, as the most recent European history has shown us. Quite the reverse. “Fiscal moderation” does not produce capital and investment. Also the “public spending readjustment” does not produce the desired effects, because the average wages of those who remain at work are lowered and the positive interest rates do not always guarantee the investment expansion, but probably above all the unearned and unproductive income.

 Furthermore, there is no free “market” of exchange rates, considering that it is guided by exquisitely political evaluations and that the privatization of public companies does not ensure greater quality of management. Quite the reverse. It entails a distribution of “donations and contributions” to the new political parties – as happened with the “Second Republic” in Italy. Finally, deregulation is not necessary given that it permits the exploitation of the lower labour costs, but does not automatically optimize the production formula.

 With these economic and financial mechanisms, the wealth produced in the Glorious Thirties has been drained. However, much less wealth than expected has materialized.

 The offensive weapons of war economics are still traditionally the same: limiting the financial flows in the enemy country; the embargo; the manoeuvres on the public debt (to cause the fiscal crisis of the State or its insolvency). Today it is a matter of overturning these rules, so as to identify those that capitalize on the Covid-19 epidemics and stop their adverse actions.

 For Italy, the cost of this epidemics is now quite clear: if it ends next May, although it is unlikely, the cost for companies – generically calculated – will be approximately 300 billion euros.

 If the epidemics lasts until next December, companies’ losses will be over 640 billion euros.

 Obviously all this requires a war economics, both in terms of a planned strategy for investment and subsidies and in terms of the future reprogramming of Italy’s production system.

 This system shall be targeted to take essential market shares away from the States that would currently like to benefit from our crisis, both to acquire our companies at low prices and to make the remaining Italian companies ancillary to their production formula.

 This is the new war economics.

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