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No. 14: The Human Factor in Firms' Performance: Management Strategies for Productivity and Competitiveness in the Knowledge-Based Economy

by Keith Newton, Industry Canada, November 1996


The basic message of this paper is simple: the performance of firms depends increasingly on the human factor. To survive and prosper in the knowledge-based economy requires flexibility and speed in learning and applying new techniques and ideas. Learning, for firms and individuals, involves shifting emphasis from the codified knowledge that is the product of structured, hierarchical systems of generating and disseminating information to the tacit knowledge that brings flexibility and creativity. That is why human resource strategies must occupy a central place in overall corporate strategy — to create the conditions in which continuous learning and innovation can take place. And it is why, for governments, also, industrial policy in the knowledge-based economy must increasingly take account of human resource management and development

The strategies for managing the human factor are in a state of flux: there are many labels but no clear boundaries. The paper seeks to describe some of the interrelated, overlapping firm-level strategies and practices, to look at evidence of their uptake and performance, and to stimulate discussion about possible roles for governments and about future research needs. In short, it is designed to be a scene-setting exercise, a starting point for policy research and development on innovative workplaces.

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