The African Development Bank Commerce Essay

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In this assignment, there will be analysis conducted on the various ways of knowledge transfer processes used by the African Development Bank to articulate the need for a growing knowledge based economy in Africa. The two major determining factors that are central in paving the way to development and economic growth are research knowledge and innovation. The processes of knowledge transfer that are involved in the critical examination of the arising issues that are related to the dynamics of public expenditure on education and economic growth and human capital development in Africa by the African Development Bank are discussed in this assignment.


The African Development Bank (ADB) has realized that Africa is an environment where knowledge development is taking a new twist. The ADB is enhancing and making possible understanding the elements of a knowledge-based economy, especially the knowledge triangle and how it can be implemented for Africa to sustain growth which is critical.

The African Development Bank (ADB) has a broad objective of communicating the relevance of knowledge and innovation to promote growth to achieve Africa's economic potential as well as maintaining that economic growth on a long-term basis.

The Bank carries out reviews of the concept of knowledge-based economy and makes discussions about it in various perspectives. Then the Bank makes an overview of recent works and findings on its diverging meanings and relevance in the development of African countries. There are also highlights of theoretical perspectives of public educational investment and economic growth, and then the bank uses this as a basis in carrying out an analysis of the effects of public investments in education in relation to economic growth and human capital development by making use of panel data of 52 African countries. The ADB makes use of a concept of knowledge based economy to achieve these objectives, and in this process there are various types of knowledge transfer processes that are involved.


African Development Bank (ADB) plays an important role in maintaining the growth of economy in Africa. It also provides support and assistance in research and policy formulation. Beside these, ADB also launched the annual African Economic Conference in November 2006. This was aimed at providing meetings for exchange of ideas within economists with the aim of improving access to information and research on economic issues, and improving economic situation in Africa as a whole.

ADB also initiated strategy to reinforce the financial sector in African economies; it launched African Financial Market Initiative (AFMI) to enhance the development of African capital markets. This is due to the underdevelopment of the African bond markets which was caused as a result of lack of institutional and operational infrastructure which leads to low levels of liquidity, narrow investment base, short maturities on bond issues and high borrowing cost.

Through this project, ADB aim to strengthen African economies by reducing their reliance on foreign currency which is mostly debt. Specific targets of the AFMI include improving financial governance, encouraging transparency, the harmonization of financial and payment policies and the promotion of regional bond markets.

In July 2006, ADB introduced a new organizational structure to reposition itself as a knowledge institution. The Bank Group should increasingly complement its financial services with knowledge services in order to enhance development effectiveness on the continent. To this end, a new Chief Economist was appointed to oversee, guide, and coordinate all knowledge-related activities across the Bank.


Before we define Knowledge management, we first have to understand what knowledge is. Knowledge is a justified personal belief that increases an individual's capacity to take effective action Nonka (1994) and Huber (1991). Action in this perspective used means physical skills and ability such as playing football or plumbing, intellectual ability like problem solving.

Knowledge is distinctly different from data and information. Data can be defined as raw facts and numbers while information is data that has been processed into a meaningful framework (Vance 1997). Conclusively we can say knowledge is information that has been verified to be true. Many people find hard to differentiate between knowledge and information, they find it difficult to identify when information becomes knowledge. Knowledge is not found in the content, structure, accuracy, or utility of the information or knowledge. It is information possessed in the mind of an individual.

Knowledge management is a set process that helps to create and distribute knowledge to meet up organization's objectives. It is a business philosophy that helps people to share their knowledge so as to meet their business objectives. Knowledge management is not only about people meeting their business objectives but also about sharing knowledge and that knowledge to use.

Knowledge within an organization is found within its staff, and it's very hard for a staff to work in an organization for a long time nowadays. So when a staff leaves an organization, their knowledge also leaves with them thereby making it a great lost to the organization concerned.

Knowledge on an individual changes as time goes on. What a person knows 10 years ago, will probably not remember some. It is very important to apply the little knowledge we have by sharing it with others.


Knowledge sharing in an organization involves the factors that allow and forbid knowledge sharing in an organization. Sharing of knowledge when viewed from the strategic perspective, it will be seen that it contributes to the success of the organization. There are a lot of barriers that need to be tackled by manager and staff of the organization.


Creating knowledge sharing is all about encouraging people within an organization to work together so as to team up and share knowledge in order to make the organization more productive. Making the knowledge more productive is more important than just sharing it. Many people in the organization have the knowledge but they do not know have the ability to act on the knowledge.

Changing the culture of an organization is very difficult. It needs a lot of sacrifices from the management and it is also a risk to the success of the business. Introducing knowledge sharing culture in an organization is a very important element to the success of the business. Although it may be weird at first, but when an organization gets used to it, it will be very hard for the organization to do without it.


One of the important ways of encouraging knowledge sharing in an organization is by rewarding each staff that contributes idea regardless of its importance and quality. It was even suggested that to encourage knowledge sharing an idea database should be created so that people within the organization should be paid for their contribution.

Another way of encouraging knowledge sharing is by motivating the staff of the organization. They should told by the senior management that knowledge sharing helps them do their jobs more effectively, help them retain their jobs; help them in personal development and promotion. The reward for these should be put in action so that they will be motivated.

Collaborative effort is what makes an organization successful. Without the help others a person will never be successful, so goes to organization as whole. By sharing knowledge, a person will gain more than he/she looses.


Nowadays, knowledge is very important to the survival of all businesses. Almost every require new knowledge as time goes in order to compete with its rivals. There are many reasons why knowledge sharing is important to the success of business, here are some:

The creation and application of new knowledge is the only way organization survives in today's business environment. The creation of new knowledge is done within members of the organization usually one person; this knowledge is shared within the members. The application of the new knowledge is toughest part, in which it requires processes and innovation.


A number of individuals oppose the idea of sharing knowledge because they think the others will steal their ideas and rightly claim it as theirs. This is because many people do not know what knowledge management is about. Knowledge management involves sharing little of what you got, but giving out everything. This is because sharing an idea person's have make it great than an individual developing on idea alone, that chances of success for that individual is very low.

Knowledge sharing is not about sharing great ideas but developing on those ideas. Sharing knowledge with others brings a lot relevant knowledge to the person sharing it with others.


Technology plays an important role in transforming business culture into knowledge sharing one. With the aid of technology today, it is now possible to share knowledge within an organization and work as team with co-workers.

Many people would say technology is not required for knowledge management to be employed. They are partially right because knowledge management is basically about people not technology. But it is technology that made knowledge management possible, without it, knowledge would have never been shared effectively within an organization.


There are four types of knowledge but two are the major ones which are Explicit and Tacit knowledge.

KNOW WHAT (EXPLICIT): This refers to the known knowledge about technical facts. This is in close relation to what is known as technical information. Like those portrayed in practicing professional law, medicine and the list goes on. Explicit knowledge is technical and needs certain amount of education which is gained through formal study. This knowledge is cautiously codified, and stored in the database of a system. The knowledge is accessed by retrieving the information in the system's database. Sharing explicit knowledge needs the support of technology which helps in the distribution of information within members in an organization.

KNOW HOW (TACIT): This refers to the skills, ability and capability of actually doing things. This is the kind of knowledge that can be developed and kept within the border of an individual firm. This knowledge has little or no time and helps to conclude how organization make decisions and influence the combined behavior of the members.

Tacit knowledge is methodological and is comprised of values, perception, insights and assumptions. This is when people have knowledge on a specific field. Tacit knowledge most of the time is underrated, almost all the information at work that are steadily changed into tacit knowledge are gotten from face-to-face contact like stories, mentoring, and internship. One-of-kind and creative conversation regularly happen in a free and open environment.

People that possess technical tacit knowledge are regarded unconsciously skilled. They know something very much but do not know how what to do to make it successful. Tacit knowledge is used by inexperienced managers to handle difficult employees.

The table below shows the use of explicit and tacit knowledge in a workplace.

Explicit Knowledge

Tacit Knowledge

Work Process

Organized tasks, Assumes predictable environment, creates knowledge object.

Spontaneous, improvised, unpredictable environment creates knowledge.


On the job, trial-and-error, meet work goals and objectives set by the organization.

Team leader facilitates and reinforces openness and trust to increase knowledge sharing and business judgments.


Trainer designed using syllabus, uses format selected by the organization

One-on-one, internship, brainstorm, people to people

Type of thinking

Logical, based on facts, use proven methods

Creative, flexible, develop insights

Share knowledge

Extract knowledge from person, code and reuse as needed for customers, email, forums.

Networking, face-to-face contact, chatting, personalized knowledge.


Often based on the need to perform to meet specific goals.

Inspire through leadership, vision and frequent personal contact with employees.


Tied to business goals, competitive within workplace, may not be rewarded on information sharing.

Non-monetary motivators, reward for sharing information directly.


May be top-down from supervisor to subordinates.

Open, friendly unstructured, spontaneous on sharing knowledge.


Related to job, based on availability and cost.

Tool to select personalized information, personalize conversations, and exchange tacit knowledge.


Based on tangible work accomplishments, not necessarily on creativity and knowledge sharing.

Based on demonstrated performance, ongoing, spontaneous on evaluation.

(Source: Smith 2001)

KNOW WHY: This type of knowledge refers to knowledge about scientific principles like laws of nature. This knowledge includes the utilization of technological development in their production process. This type of knowledge can be gotten when firms interact with educational research institutions through contacts and joint activities in production. In the African context, a key challenge is to create functional linkage between public, private entities (firms) and knowledge generating institutions in the quest for transforming Africa into a knowledge economy.

KNOW WHO: This refers to the person or people who know what or who know how to do within an organization. It comprises the formations of social relationships that makes access to experts easy and improve the use of their knowledge effectively.

The driver of a knowledge based economy is the ability to embrace and use the above four kinds of knowledge and innovation as central elements of involving the economy on a pathway to development in a permanent way.


Isaacs (1999) stated that explicit knowledge cannot be changed to tacit knowledge. But tacit knowledge can be converted to explicit knowledge through observation and discussions. There are four basic patterns for creating knowledge in an organization. These four patterns exist within spiral of knowledge:

From explicit to explicit: This involves bringing together individual pieces of explicit knowledge to form one. A good example of this is bringing together several data together write an article.

From tacit to tacit: This involves learning from examining, emulating and practicing. It is the way of learning things within an organization from mentors and peers. Knowledge shared here is not explicit in nature.

From explicit to tacit: Tacit knowledge becomes part of a person's knowledge when it is internalized. This knowledge is used to broaden, extend or idea in an organization. Explicit knowledge using a person's reference can be understood and internalized.

From tacit to explicit: Changing tacit to explicit is looking for a way to express what cannot be expressed. Moving from tacit to explicit involves stating one's perception of the world.

When explicit and tacit knowledge come together, it is a process that involves two different ideas into one which involves symbols and images.


Knowledge based economy came from a detailed recognition that both knowledge and technology plays roles in economic growth, as embodied in human capital, innovations and technology (Juma and Awara,2006). This is not a new role and has always been familiar with in contemporary literature (OEDC, 1996). Based on analysis, a knowledge based economy is an economy in which the distribution, exchange, production and use of knowledge is the key driver of economic growth, wealth creation and employment generation (McKeon, Weir 2001).

No doubt there is a move towards a knowledge based economy in which information technology is the primary medium of exchange. A knowledge triangle arises between industry, research and education thus creates a solid connect between knowledge generation, utilization, the transformation of the knowledge into economic growth through the production of knowledge intensive goods and services.



The team responsible in promoting knowledge based economy performs this task across several African countries. The appointed team leader and the team members will perform similar tasks across these African countries and the team leader will work out on the objectives to be achieved by the team.

The same team is responsible for laying out the tasks and objectives and the same team is responsible for achieving the set out goals. This makes the source team also the receiving team as the knowledge is a repeated action and the team members gain from each other. The creation of the knowledge and distribution of the knowledge among the team members happens in a linear model of innovation which based on simple conversation to generate knowledge and share among each other in order for them to use to achieve their main objective which promotes knowledge based economy across the African continent.

The inferred knowledge (tacit) of the team members involved in the task is gained by basic research that leads to discoveries with out any consideration to potential future applications at first. Then the members who now have the knowledge in their heads share it among other team members through conversation during meetings or any other time.

Any time there is are meetings being held by the team, every one that is involved in promoting a knowledge based economy is present for the meeting. Its during the meeting that the team leader assures that every member is up to their assigned task and report during the meeting also. Through this process there is direct sharing and gaining of knowledge among the team members as they discuss their findings and experiences.


It provides ways for the bank to avoid costly mistakes from happening over again. The team is familiar with similar work that they have done in the past and they will apply the knowledge in present and future work which will eliminate mistakes in the process.

Efficiencies of speed and quality are increased in the process of this process of knowledge transfer. Performing of similar tasks by the team will be easier every time subsequently.


It is the same team members that have performed and completed a task that will be responsible again in doing the task next time.


This is a very common practice among the team of the bank that helps in achieving a knowledge based economy in African environment. There are several teams that have similar tasks that have to be performed, when a team gains knowledge as a result of completing a task, they pass on this knowledge to another team elsewhere that are involved in also promoting a knowledge based economy. As the receiving team is learning from the source team, they would have to modify this knowledge to make suitable for their use even though it is similar to what they need for completing a task.

For example the bank has learned that the linkage between education, knowledge and innovation in most developing African countries are inbuilt in the perceived role of education in enhancing employment. When this was found out by a team of the bank in a developing African country, this knowledge was shared with other teams working on similar objective which is to gain a knowledge based economy, but then this was modified to suit the various types of tasks the different team was dealing with and they added that the role of education is perceived to enhance income and reducing poverty.

This way all the teams of the African Development Bank carry out the knowledge through the various teams at different countries. These develop their individual skills by putting their knowledge into use for everyone that is involved with them by extensive and interacting learning processes which makes the knowledge to be in productive use. This shows that a team in a country can help the skills of another team in a different country under the same circumstances.


The knowledge of building a well defined knowledge based economy is carried through out the organization (bank) which increases awareness.

The exchange of knowledge within the bank and the teams across the different African countries is mutual, every one gets to learn something and hence a more productive approach is achieved.


The teams of the bank mostly speak different languages. It is sometimes difficult for one team to try to convey or pass on their knowledge as exact as they want to another different team performing a similar task in a different location or country.


In order for the African Development Bank to help the African countries engage in a knowledge based economy, the teams responsible for this task need an approach that will make it possible. This task is infrequent but it is important to the organization (bank) and the knowledge and objectives as well.

The bank came out with a strategy in order to help achieve this task. The bank carried an empirical analysis of knowledge and economic growth that influences knowledge based economy in Africa. A model was brought up by the bank as a strategy. As a result an analytical equation was brought by the bank which is:

Growth = α + α POP + α LifeExpecµ + α PubExp + Ñ”µ

The above equation has been put into use by the bank as a strategic approach to obtain results that have helped in the objective of achieving knowledge based economy. It is seen that the equation involves strategic level of work and affects the whole organization's task. This equation is applicable by the bank needs to accomplish a strategic task that occurs infrequently but is of critical importance to the whole organization with regards to promoting a knowledge based economy.

The equation was designed by the bank's senior team members and approved by the high level managers for use. The collection of data by the bank to obtain results is done in real time, the results obtained are put into the equation and growth is calculated in real time. After calculating the growth, the bank will have knowledge about the progress of every country within the African continent with regards to building a knowledge based economy.


Before a strategy is used as an approach to perform a task, the high level employees will have to approve of it. This enhances the quality of the strategy because it is evaluated at each level for better results to be obtained.


Whenever the higher level staff of the bank comes up with ways to solve tasks, the whole organization must obey the rules and decisions made by the higher level staff.



The various teams of the bank located at different countries that are responsible for building knowledge based economies should encourage their members to engage in online forums. These online forums will really help in sharing, providing suggestions and voicing out opinions. The various teams perform similar tasks and there are members that are experts in this field, through online forums, they can provide and share valuable information and knowledge with the other members form other teams.

The electronic forums can be monitored and supported on a regular basis. Various levels of participants in the forums should also be supported by the bank. The knowledge on the forums will then be pulled for use.


This is a very useful transfer system as a platform that the bank can put into practice for all its team to engage in. Through this process, the team members can share their best practices among others within the same community. The top level staff of the bank can as well be a part of this process and share with the lower level staff and vice versa. It can be done through the intranet of the bank and the sharing can take place not only work related matters but other useful knowledge as well.


The African development bank has adopted quite a few transfer knowledge processes and put into practice especially when building a knowledge based economy in African countries. Nevertheless, there is always room for more improvement. The process used by the bank have proved quite valuable and convenient, but the bureaucracy level stands as a barrier, the top management rarely accept and use the views of the lower level staff, thus there is almost no learning from the lower level staff by senior employees of the bank.

In conclusion, the other two suggested knowledge sharing processes will help overcome the bureaucracy barrier to some level.