The driving forces behind internalization of KM can be listed as follows:
Globalization: markets and products are more global. Products by Nike and Virgin are known the world over. Today, even resourcing is becoming global. Thus many companies outsource manufacturing and software development to distant locations.
Information/Knowledge Intensity: efficient production relies on information and know-how; over 70 per cent of workers in developed economies are information workers; many factory workers use their heads more than their hands.
Networking and Connectivity: developments such as the Internet bring the ‘global village’ ever nearer.
The net result is that goods and services can be developed, bought, sold, and in many cases even delivered over electronic networks. Electronic commerce offers many advantages in terms of costs savings, efficiencies and market reach over traditional physical methods. These developments are the driving force behind growing importance of knowledge worker and better knowledge management to have competitive advantage over others.