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Regional knowledge management: the perspective ofmanagement theoryJingyuan Zhao a & Patricia Ordóñez de Pablos ba Business Administration Postdoctoral Center , Harbin Institute of Technology , No.92, WestDa-Zhi Street, Harbin, Heilongjiang, China , 150001b Departmento de Administracion de Empresas, Facultad de Ciencias Economicas ,Universidad de Oviedo , Avd del Cristo s/n, 33071, Oviedo-Asturias, SpainPublished online: 17 Dec 2010.

To cite this article: Jingyuan Zhao & Patricia Ordóñez de Pablos (2011) Regional knowledge management: the perspective ofmanagement theory, Behaviour & Information Technology, 30:1, 39-49, DOI: 10.1080/0144929X.2010.492240

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Regional knowledge management: the perspective of management theory

Jingyuan Zhaoa* and Patricia Ordonez de Pablosb

aBusiness Administration Postdoctoral Center, Harbin Institute of Technology, No.92, West Da-Zhi Street, Harbin, Heilongjiang,China 150001; bDepartmento de Administracion de Empresas, Facultad de Ciencias Economicas, Universidad de Oviedo, Avd del

Cristo s/n, 33071 Oviedo-Asturias, Spain

(Received 18 March 2010; final version received 5 May 2010)

Knowledge management is one of the results of combination of management science and information science.Knowledge management has already established its own theoretical system, and has caught the attention of boththeorists and practitioners alike. Organisational knowledge management study has made tremendous progress whileregional knowledge management study is still in the initial stage, further research on regional knowledgemanagement has become urgent and necessary. This study discusses regional knowledge management from theperspective of management theory, analyses the functions of regional knowledge management in terms of planning,organising, controlling and leadership, and presents a framework of regional knowledge management based onmanagement theory.

Keywords: knowledge management; regional knowledge management; management theory; regional innovationsystem; management function

1. Introduction

Regional knowledge management is to manage knowl-edge resources by means of management in the regionbased on management theory and regional science.When compared with enterprise knowledge manage-ment, regional knowledge management is more con-cerned about knowledge innovation management andknowledge development management in the region,managing knowledge as a kind of resource in theregion so as to promote the innovation, spillover,circulation and proliferation of knowledge, andincrease the regional competitiveness to reach themaximum level of benefits.

The idea of regional knowledge management canbe traced back as early as in 1997. Storper (1997)pointed out that the importance of regional level hasbeen increased in the field of management during pasttwo decades. And over the past decade, a large numberof documents show that evolutionary economics,institutional economics, network theory, innovationand learning systems as well as sociology have focusedon issues at the regional level. The region is increas-ingly seen as an appropriate level to nurture theeconomic, social, cultural and political activitiesaiming at improving citizen welfare through policiesand measures. Enterprise knowledge management hasformed a complete scientific system while regionalknowledge management is a new issue. With the

evolution of knowledge management, regional knowl-edge management is receiving increasing academicattention.

Why is regional knowledge management impor-tant? Nonaka and Reinmoller (1998) claimed that theprocess of all knowledge transforming needed supportfrom the region in order to help regional knowledgecreation, special attention should be directed toknowledge management at the regional level. Nonakaand Reinmoller (1998) stressed the geographicalproximity to ensure frequent meetings, and face-to-face communication could strengthen the sharing oftacit knowledge. Regional development and innova-tion networks are characterised by geographic proxi-mity. Early studies have shown face-to-facecommunication is necessary in this structure in orderto establish a relationship of trust between people,otherwise partners, particularly individual employees,keep away from each other or completely do not knoweach other, which makes it difficult to build confidenceand eliminate prejudice (Melkas 2004). Above thinkingis actually one aspect of regional knowledgemanagement.

Knowledge is divided into two types: explicitknowledge and tacit knowledge (Nonaka andTakenchi 1995). Explicit knowledge can be expressedand coded easily by using language and other ways.Explicit knowledge is relatively easier to transfer, for

*Corresponding author. Email: jingyzh@gmail.com

Behaviour & Information Technology

Vol. 30, No. 1, January–February 2011, 39–49

ISSN 0144-929X print/ISSN 1362-3001 online

� 2011 Taylor & Francis

DOI: 10.1080/0144929X.2010.492240

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example, part or all of such knowledge can be deliveredand transferred by means of information technology.Tacit knowledge is usually linked with action, and isusually context-dependent, and it is often difficult totransmit, transfer and code. In practice, with theeconomic globalisation and the rise of knowledge-based economy, local knowledge, especially local tacitknowledge is very important for enterprises to obtaincompetitive power, regional-level knowledge, learninginfrastructure and the development of new productionelements, etc. to exceed business management strate-gies of single enterprise. The establishment of regionaleconomic advantages increasingly relies on the capa-city of knowledge flow and knowledge utilisation. Infact, the regional specialisation is the inevitable resultof global economic integration, therefore, a newlearning region is needed in the new era of globaleconomy integration, this kind of region is defined by anumber of mutual standards, where the basic elementsinclude the continued progress, new ideas, knowledgecreation and organisational learning (Florida 1995).The region becomes the focus of knowledge creationand continuous learning, and is one of the keyelements of supply architecture for innovation andlearning economy (Morgan 1997, Storper 1997). Thisis mainly due to globalisation that does not mean ‘theend of geography’, the specialisation increases theforms of existence in terms of regional differences,resulting in knowledge creation, development oracquisition, as well as the process of so-called collectivelearning in learning region. Main characteristics ofcollective learning are interaction and accumulation,which require management intervention. In the generalnon-learning region, the interaction, dynamic synergy,knowledge accumulation and spatial diffusion betweenorganisations, the relationship between suppliers andcustomers, the formal or informal cooperation be-tween enterprises in some industrial sectors, themobility of highly skilled technicians in local market,the cultivation of entrepreneurship and the derivativeof new enterprises, etc. have raised a number ofmanagement issues. Additionally, regional non-tradeinterdependence, in particular the local tacit knowl-edge, is often a key of forming regional corecompetitive advantage. Coexistence in the samegeographical region is favourable for organisations toshare tacit knowledge and local culture, and facilitatethe interaction and synergies between organisationsresulting in facilitating collective learning. In addition,a lot of local knowledge is formed by long-termaccumulation of local organisations, and is deeplyrooted in local culture, and has strong feature of path-dependence with some kind of inertia. Only people andorganisations entering the region can understand thisknowledge. In European Commission Green Paper,

the regional level is considered to be the best level toprovide necessary support for innovative organisa-tions. Regional innovation, knowledge and learningdevelopment strategies can influence innovative andlearning ability of local enterprises, regional environ-ment is an important foundation for enterprises toobtain competitiveness. Emphasising learning andknowledge creation and diffusion from the level ofregion is a more long-term strategy, which can try toavoid the monopoly of knowledge, and indirectlyovercome unemployment, social inequality and otherissues (Larsen 1999). Regional innovation systempolicy attempts to improve the knowledge basestructure and the relationship between corporationand association. In addition, those policies respond toindividual and collective innovation needs, and sup-port a regional endogenous potential by encouragingtechnology diffusion at the regional level (Doloreaux2002).

Making the learning and innovation of localknowledge quickly and dynamically adapt to rapidglobal changes through regional knowledge manage-ment is the basis for the region to access to the globalcompetitiveness. The objective of regional knowledgemanagement is the establishment of regional innova-tion and learning environment, regional-level educa-tion and training system and policies are conducive toimproving the quality of the local workforce, thecultivation of regional innovation networks andregional social capital is conducive to the cooperationof learning modes, such as individual learning,organisational learning, institutional learning and soon. Promoting regional knowledge creation andlearning through regional knowledge management isconducive not only to the interaction among intra-regional organisations, but also to the development ofcooperative relations with other parts of the world as awhole to speed up the flow of knowledge and expandlearning outlook. This shows that regional knowledgemanagement is the focus of future research, andpresents new research directions and topics foracademe.

2. Regional knowledge management study review

With the evolution of knowledge management, knowl-edge management is divided into the enterprise knowl-edge management and regional knowledgemanagement, enterprise knowledge management hasbecome a complete scientific system while regionalknowledge management is a new topic, knowledgemanagement is gradually transformed from the en-terprise level to the regional level, regional knowledgemanagement causes wide concern. Storper (1997)claimed that the importance of knowledge

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management at the regional level was recognised in thepast two decades of studies, the region had become thefocus of knowledge creation and continuous learning,and was a key element of the supply architecture forinnovation and learning-based economy, this view wasechoed by Morgan (1997).

Nonaka and Reinmoller (1998) claimed whenknowledge was created in a region, the process ofknowledge transforming must get support from theregion, therefore regional knowledge managementshould be paid special attention. Close distance ofspace is conducive to the exchange and sharing ofknowledge. Florida (1995) pointed out new learningregion is needed in the new era, knowledge creationand organisational learning are two basic elements ofsuch learning regions. Keeble et al. (1999), Cimoli andde la Mothe (2000) claims that the process of localknowledge creation, development or acquisition isessentially collective-learning process, collective learn-ing through interaction and accumulation is conduciveto accumulation, diffusion and learning of knowledge.

Current researches on regional knowledge manage-ment mostly focus on regional innovation system.Cooke and Morgan (1994) made earlier and morecomprehensive theoretical and empirical researches onregional innovation system. Cooke et al. (1996) setforth the concept of regional innovation system inmore detail. This school claims that the regionalinnovation system is regional organisational systemmainly constituted of production enterprises which aregeographically associated and cooperative with eachother, research institutions and higher educationinstitutions, this system support and generate innova-tion. Wiig (1994) discussed the concept of regionalinnovation system and claimed that broad regionalinnovation system should include the following:enterprises for production, innovation and supply;educational institutions for training innovative talents;research institutions for conducting knowledge inno-vation and technology production; government insti-tutions for restricting or supporting innovationactivities by financial policies and regulations; innova-tive service institutions in terms of finance andcommerce. Other scholars discuss the concept ofregional innovation system from different perspectives(Asheim and Isaksen 1997, Cassiolato and Lastres1999). Many scholars gave a great deal attention to thetheory research of regional innovation system andachieves some results. Previous literature has beenmainly related to following aspects: first, the basicconcepts and contents of regional innovation systemstheory; second, the operation mechanism and mode ofregional innovation system; third, regional innovationenvironment research from the political, economic andcultural perspectives, domestic and foreign scholars

attach great importance to the importance of innova-tion environment. In short, the concept and function ofregional innovation system basically has the sameunderstanding, although how to achieve these func-tions needs further study of management.

As for the study on regional knowledge manage-ment, Zhang (2005a,b, 2006) finds that regionalknowledge management is still at the exploratory stagecompared with enterprise knowledge management. Todynamically respond to opportunities and challengesof informationisation and globalisation, and sustain-ably develop in the dynamic market to solve issues interms of regional knowledge production, knowledgeexchange as well as knowledge allocation, the regionneeds to conduct effective knowledge management. Asa knowledge system, regional knowledge managementshould aim at designing an adaptive system, andstrengthen individuals and public institutions’ abilityto knowledge production and knowledge value realisa-tion. The core of public administration lies in inspiringindividuals with the initiative of creating knowledge, aswell as the circulation and distribution of publicknowledge. Regional knowledge management mustfollow the principles of humanism, in accordance withthe principle of market laws, the principle of region,and institutional learning principle, and adopt corre-sponding multi-level management model (Zhang2007). De Noronha Vaz (2006) discusses the possibilityof setting up a lasting partnership for regional knowl-edge management in the politically so importantAtlantic space. Comprehending Spain, Portugal,France, United Kingdom and Ireland, this part ofEurope also integrates regions lagging in terms of tacitand codified knowledge environments and consequentinnovative attitudes. The conclusion allows considera-tions related to the present context for the developmentof an Atlantic spatial development strategy. RegionalCommittee for the Eastern Mediterranean (2006)claims knowledge management for public health is across-cutting activity linking together all functions ofthe health system. The three elements of knowledgemanagement, people, processes and technology, worktogether to deliver the expected health outcomes in anefficient and cost-effective manner. The strategy callsfor countries to take steps towards institutionalisationof knowledge management activities, develop capacityand make full use of the available health knowledge.Zhao (2006, 2007, 2010) studies on regional knowledgemanagement model, and claims that knowledgemanagement model consists of three elements: knowl-edge innovation management, knowledge diffusionmanagement and basis environment establishment.The main task of regional knowledge management isto establish regional innovation environment, andmanage regional knowledge innovation and knowledge

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diffusion by using management tools, and enhance theregional competitiveness and cooperative powerthrough the development of regional innovationsystem. Two important issues in regional knowledgemanagement model are the establishment of innovativeenvironment and the definitude of government role.Muresan (2008) claims the challenge is to create avirtual environment for the regional knowledge man-agement and consensus building related to the regionalstrategy development. The scientific base for the designof the regional development strategy is represented byan improved set of socio-economic indicators andbenchmarking tools.

3. Analytical framework-based management theory

This study finds that the management has many basicpoints, such as the management objective, the im-portance of management functions, the distinctionbetween management and general operating activities.Based on these basic points, to study regional knowl-edge management, the authors highlight the manage-ment functions and define the concept of managementthat is the general term of a series of work includingplanning, organising, leadership and control, etc.under the constraints of specific internal and externalenvironment so as to further effectively use organisa-tional resources to achieve organisational goals. Asshown in Figure 1.

Management functions are not independent, andare not completely separate from each other, manage-ment functions are the integration of mutual penetra-tion. From the time logical relationship ofmanagement functions, they are usually in accordancewith an order, namely planning first, then organising,followed by leadership and final control. Thesemanagement functions are integrated with each other,and are carried out at the same time. Withoutplanning, the control function can be implementedwhile the experiences will not be able to accumulatewithout control. While the control is implemented, thenew planning needs to be made or the previousplanning needs to be amended. Without organisational

structure, the leadership function can not be imple-mented. The implementation of leadership functioncan adjust the organisation in turn. The managementprocess is a cycle of various functions in which generalcirculation includes minor circulation. As shown inFigure 2.

According to modern geography dictionary, regio-nal management is that relevant agencies and depart-ments coordinate, control and manage regional social,economic, environmental and other issues throughcertain methods and means. Regional managementcontent includes the governance of resources develop-ment and utilisation, social economic development andenvironmental protection; the coordination betweenregions, thereby bringing it into line with the require-ments of general interests. Economic growth, environ-mental stability and social equity constitute three basicpurposes of regional management, which guarantee theeffectiveness and efficiency of regional management.Besides the diversification of management goals,management functions in region field are richer thanin enterprise field. The region includes not onlyorganisations but also self-organisations, which isdifferent from the enterprise. Managers are facedwith organisations in the process of enterprise manage-ment while managers are faced with more structures inthe process of regional management since organisa-tions are diversified in the region. Leadership orcommand is the other function of managers, theleadership or command in regional management isimplemented mainly by the policy approach, decision-making and administrative organisations, thesefeatures are in fact the administration. Executivemanagement is equivalent to leadership function inthe regional management. In short, elements ofregional management functions include the following;planning: choose means, determine goals, formulate

Figure 1. Process of management activities. Figure 2. Management process.

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action plans, criteria and guidelines to complete theplanning; organising: restructure regional system ororganisations; control: monitor and adjust the state ofregional system, guide the evaluation; leadership:overall command, lead and plan the regional system,including determining policy, administrative decision-making of starting major projects, making adminis-trative rules and regulations, approving budget andperformance, carrying out planning.

Corresponding with the development economictheory, this study claims that the contents of regionalmanagement should not be limited to populationmanagement, development management and resourceenvironmental management, knowledge managementshould also be an important content of regionalmanagement (Zhao 2006, 2007). It is an importantissue how to apply the management functions toregional knowledge management, this study willdiscuss in the next chapter.

4. Management analysis of regional knowledge

management

4.1. Planning

Planning function of regional knowledge managementis embodied in the implementation of regional scienceand technology policies. Fan (2005) classified thenational science and technology plans and studied onthe classification, according to Fan’s (2005) classifica-tion, this study divides the planning function ofregional knowledge management into the followingaspects.

4.1.1. Basic scientific research programme

Basic scientific research is to carry out systematic andcreative activities for understanding nature laws, and isthe core of science. The basic scientific researchprogramme under the country’s goal is a basic taskof planning function of regional knowledge manage-ment. Regarding the basic scientific research pro-gramme, the basic science is hard to organise andcontrol through a coherent and clear planning,however at least the corresponding direction and theprinciple of development can be broached although itis difficult to determine the specific content of basicscience. The region should make plans to develop basicscience according to direction and principle of nationalbasic scientific research programme based regionaladvantages and regional orientation.

4.1.2. New technological revolution programme

The new technological revolution programme is toresearch and develop new science and technology

policy facing technological revolution. Regarding theinformation technology revolution, the arrival of thebiotechnology revolution, and the future nanotechnol-ogy revolution, the corresponding programme ofinformation technology revolution should be made,and the biotechnology programme, nanotechnologyrevolution programme should be developed. Since the1990s, the information technology revolution hasbrought new patterns of economic development, andwidely impacted on all spheres of society andindividual life. Similarly, biotechnology is in a newera of astonishing breakthrough. In the end of the 20thcentury and the beginning of the 21st century,nanotechnology has been a new breakthrough, indi-cating the wave of the future revolution. The regionshould use policies and measures to develop threestrategic technologies.

4.1.3. Technology foresight programme

Technology foresight is a process or programmeincluding investigation and study of science andtechnology, and future long-term efforts of economicand social system, and aims at confirming emergingcurrent technologies and strategic research areas likelyto produce the greatest economic and social returns(Martin 2001). From the beginning of the 1990s,government-led technology foresight rises in manycountries. The foresight is closely linked to regionalplanning and programme, and is a step of long-termprogramme towards regional technological develop-ment. The role of foresight on region strategic planningof science and technology not only embodies in theresults of foresight, such as a list of priority areas, butalso has an important reference value for the formula-tion of long-term planning. Because of the processbenefits of foresight, the foresight provides a moreeffective tool for the development and implementationof long-term technology programme.

4.1.4. R&D programme

The regional R&D programme should be made interms of planning function of regional knowledgemanagement. R&D projects form the bulk of objectiveof regional R&D programme in general, in themeantime give consideration to regional bases build-ing, personnel training and infrastructure construction.The functions of regional R&D programme to solvemajor scientific and technological problems are closelyrelated social and economic development in order topromote the development of scientific technology andeconomic society, and improve the operating efficiencyof regional innovation system. It is worth emphasisingthat the government actions and market actions are

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not completely fragmented, the implementation ofregional R&D programme in the integration field ofscientific technology and economy is not governmentbehaviour replacing corporate behaviour, but thebehaviour of guiding enterprises since the govern-ment’s function is to guide and inspire enterprises toinvest, encourage research institute to cooperate withacademia and industries as well as enterprise joint inorder to complete the independent innovation ofenterprises.

4.1.5. Science and technology cooperation programme

The science, technology and innovation is increasinglybecoming a global phenomenon, where performance isin three aspects: international development and utilisa-tion of technology; global production of knowledgeand skills; world scientific and technical cooperation(Archibugi and Iammarino 1999). The region shouldmake cooperation plan with other regions and theworld in science and technology, and should beconcerned about the establishment of MNCs’ R&Dinstitutions in the region and their impact on localR&D and technology, as well as how to use them toenhance local technology capacity, and adopt incentivemeasures to attract foreign capital investment in localR&D activities to access foreign R&D spilloverbenefits. Regarding the globalisation of science andtechnology cooperation, there are a growing number ofdifferent issues of policy. For example, the infrastruc-ture of developing technical cooperation, such asscience and technology parks, the promotion ofresearch-industry cooperation, interregional or inter-national organisations’ technical and industrial coop-eration, etc.

Regional management planning pyramid relates tocontents top-down followed by an increase. Thisnested form is particularly important for regionalknowledge management because the region is morecomplex and enormous system than the enterprise. Asthe regional control is to be achieved much by thepolicy so that policy issues must be given a moreimportant role in the regional management, theimportance of planning function of regional knowl-edge management can be seen. Planning has two basicrequirements: predictability and coordination. Predict-ability as the foundation of planning evaluatesorganisation valuation and environment change sothat planning is set up on the basis of reality. Regionalknowledge management planning needs to analyseregional economy, assess regional own economic,environmental and social evolution trends, and thenmake the goals and choose development strategies. Inthe process of planning, it is necessary to forecast theimpact of policies and project measures of planning on

the regional economy, environment and society so asto put forward a variety of action programmes andidentify the most suitable one. The other aspect ofplanning is coordination, planning includes manycontents where target is constituted of a number ofspecific objectives that need various special schemes tocomplete. Regional knowledge management planningis important and complex, the coordination is neces-sary when there are contradictions among variousspecific programmes.

4.2. Organising

Zhao (2006, 2007) claims that regional innovationsystem is organisational form of regional knowledgemanagement, is also an important management meansto achieve regional knowledge management. Regionalinnovation system is mainly constituted of enterprisesas innovation main body, technological and scientificinstitutions and universities as innovation source,intermediary service agencies as an important joint ofcommunication and knowledge flows, the governmentas the external environment creator for enterprisestechnological innovation, as shown in Figure 3.Enterprises are the mainstay of regional innovation,universities and institutions are a source of knowledgecreation, service industry, such as intermediary agen-cies, are an innovative regional tie of regionalinnovation, and the government is the facilitator anddefender role to regional innovation activities.

The organising function of management in regionalknowledge management behaves in regional innova-tion system, which is an effective organisation ofregional knowledge management. The core of regionalinnovation system is the creation, transfer andapplication of scientific and technological knowledge

Figure 3. Schematic representation of regional innovationsystem.

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to promote the regional knowledge innovation, tech-nological innovation, knowledge dissemination andapplication, and its fundamental task is to internalisescientific and technological knowledge into variables ofregional economic growth, promoting regional indus-trial upgrading and economic growth in high-quality.

In general, the regional innovation system empha-sises the flow of techology and knowledge betweenpeople, enterprises and institutions, which is the key ofinnovation process. Knowledge transfer is a process ofinteraction rather than unilateral knowledge delivery,the innovation and technological development is theoutcome of a series of complex relationship of variousbehavioural agents in the system. Innovative activitiesare related to R&D activities, such as the emergence ofnew ideas, product design etc, also related to a seriesof production and marketing activities, such as the trialof new products, production, and marketisation, whichis an extremely complex process of interaction. In theprocess, enterprises, universities and research institu-tions, education, innovation support and service orga-nisations, policy-makers, financial sector, laws, culture,etc. in regional innovation system are involved ininnovation activities, and impact innovation activities.Regional innovation system performance depends lar-gely on the creation, transfer and application of scientificand technological knowledge. If the circulation ofscientific and technological knowledge in regionalcurrent economic system is very smooth, the demandersfor science and technology will easily get the knowledgein need, and the providers of scientific and technicalknowledge do not have problems in the transform ofscientific and technological achievements, it can be saidthat the innovation system is healthy; otherwise, theinnovation system has serious problems.

4.3. Control

Control function of management is very different interms of regional knowledge management and enter-prise knowledge management. Enterprises can becontrolled by achieving certain goals and targets, thecontrol of region is conducive to the formation ofinnovation environment of knowledge spillover, forexample, the region protects intellectual propertyrights and patents, prevent academic corruptionthrough regulations and systems. Of course, thecontrol of the region should be moderate, otherwise,the lack of a relaxed environment is not conducive inbringing the characteristic of knowledge spillovers intoplay. Factors of information technology, globalisationand dynamic market, etc. become a driving force ofregional knowledge management. Regarding solvingsome problems by means of regional knowledgemanagement, control function of regional knowledge

management is mainly reflected in two aspects: toresolve regional issues of failure and form regionalequity of knowledge sharing. The specific discussion oncontrol function of regional knowledge management isfollowing.

4.3.1. Resolve failure issues within the region

Knowledge becomes the first element of regionaldevelopment in information era (Lundvall and John-son 1994), the knowledge production, circulation andvalue realisation is the core of regional development,regional sustainable development can be achieved onlythrough transforming information into knowledge,and effectively responding to dynamic changes ofenvironment. However, the region may exist the stateof failure in terms of knowledge production, knowl-edge exchange and circulation. These problems requirethe control at regional level to address failures of mainknowledge production and knowledge market ex-change, see Figure 4.

4.3.2. Failure issue of knowledge production

The main knowledge production is a learning processin essence. The learning main body adapts informationfrom the external environment, and forms internalknowledge, build the behaviour capacity of changingenvironment, its essence is a process of knowledgeformation and capacity building (Zhang 2005a). In thelearning process, objective environmental factors limitthe main body’s learning purpose, mode, approach,thus affecting the effectiveness of learning, or leadingto learning failure. Smith (1997) divides learningfailure into four types from the point of view of mainbody learning: the inadequate infrastructure provisionand investment causes the failure of learning, the lackof knowledge complement and unclear property rightsbetween enterprises leads to the failure of transaction,

Figure 4. Control function of regional knowledge manage-ment.

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the backwardness of original knowledge basis results infailure, the background of mechanism and rules thathas unintended and negative impacts on learningcauses the failure of system. Under the market ruleof utilitarianism that minimises cost and achieves themaximum effectiveness, the learning opportunities ofvulnerable groups and marginalised groups, as well aslearning interests are ignored, the market mechanismcannot change the uneven distribution phenomenon oflearning and knowledge, and also will strengthen thesocial exclusion of learning, leading to the persistenceof social problems between groups, thereby affectingthe stability of the region.

4.3.3. Failure issue of knowledge exchange

There are many reasons for the failure of knowledgeexchange. Asymmetric information problem: the in-formation asymmetry of trading two sides of knowl-edge production is the root cause of transaction, also isan important reason of market failure. Ownershipproblem: knowledge products own part of a publiccharacter, and part of a private nature (Romer 1986),which results in that the process of market transactionof knowledge easily leads to market failure. Afterknowledge transaction, as the number of holders of theknowledge are increasing, this knowledge is graduallytransformed into public goods. Because of high costsand almost zero marginal cost of knowledge products,the piracy, copy and many free rider behaviour makethe interests of subject with intellectual property rightshas been excluded, knowledge innovation mechanismis damaged, resulting in the shrinking of new knowl-edge transaction market. Knowledge type problems:tacit knowledge cannot be exchanged alone in themarket, only be traded through learning in smallerscope due to its personal sattributes and geographicalroots. The nature of tacit knowledge and its applica-tion characteristics are likely to result in failure ofknowledge market exchange. Insufficient effectiveproblems: the extensive use of information technologycan make market demand unlimited in theory, buteven in the absence of intellectual property protectionsystem, knowledge is not available by any subject, thatis, effective demand of knowledge is very limited.Cognitive problems: the exchange of knowledge andinformation is a cognitive problem, the communica-tion process between subjects of knowledge requires acommon cognitive framework of two sides. Thisframework plays a key password function in exchangeprocess, mainly expressed in sharing language rules,ways of thinking and value judgments (Lorenzen1998). The communion of knowledge is always limited,or communion cost is increased, and even thecommunion fails.

4.3.4. Form regional equity of knowledge sharing

Control function of management is to measure theactual work, and correct deviations, therefore the otherperformance of control function of regional knowledgemanagement is regional equity of knowledge sharing inthe core area, the network and the edge area. Thedriving force for regional development is from the corearea of knowledge innovation, knowledge innovationproliferate from the core outward through the net-work, impacting marginal economic activities, socio-cultural structure, power organisations and clustertype (Zhang 2005a). Although the marginal zone alsocreate and accumulate knowledge, the speed ofinnovation and accumulation is in slower rate thanthe core area due to the constraints of learninginfrastructure and human resources. The productioncapacity of innovative knowledge has differencesbetween the core area and the edge area. Thedecision-making position in terms of regional econom-ic and social development is unequal, the decision-making from the core area control the marginal zone,the decision-making from the edge results in lessimpact on the core area. This situation continued willform learning difficulties of marginal zone, that is,where learning is the most urgent is very weak inlearning ability, mainly embodying in the shortage ofeffective demand and effective supply of learning.Thus, the region should form regional equity ofknowledge sharing in the core, the network and theedge of the region through coordination of controlfunction, and policies and measures (see Figure 4).

4.4. Leadership

Performance of leadership function on regionalknowledge management is namely the role ofgovernment, members complete organisational objec-tives through the government’s administrative inter-vention and incentive. The government as the leaderand guardian should have functions that makepolicies, systems and planning, and provide commontechnology and facilities. Regional policy-makingmust be conducive to the learning process so as topromote enterprises’ localisation, timely adjust in-stitutional framework, and create the conditions forlocal knowledge creation, diffusion and storage, etc.(Ding 2005). Practice has proved that a goodinnovation environment and infrastructure is thecore of local business resources to promote localenterprises’ innovation. The government shouldprovide a good learning and innovation environ-ment, build an innovative atmosphere, create sys-tematic conditions for regional innovation as a wholethrough a variety of policy support systems.

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According to the role on regional innovation,variety of policies can be divided into three typesincluding incentive policies, guidance policies andcoordination policies. Incentive policies aim at en-couraging innovation desire and creating a favourableexternal environment for innovation subjects, inculd-ing monetary policy, fiscal policy, tax policy, distribu-tion policy, information policy, etc. The governmentestablishes innovation incentive mechanism throughtaxation and financial policies. Guidance policies focuson the adjustment optimisation and opening up ofindustrial structure to enable enterprises to clearnational and regional technology development fieldsand incentive measures, inculding industrial policy,science and technology policy, etc. Coordinationpolicies are mainly to coordinate the process, therelationship between innovation subjects, the contra-dictions arising in the course of innvation in differentregions, including promoting policies of industry,academia and research cooperation, coordinatingpolicies of conflicts between regions.

Zhao (2006, 2007, 2010) proposes that the govern-ment should stress the spirit of service in regionalknowledge management. The government has animportant duty as manager in regional knowledgemanagement and R&D centre growth. Then what isthe essence of management? The essence of manage-ment is services. Regional knowledge managementachieves its purpose through public administration,including planning, organising, leadership and control,as well as the coordination of four functions. But it is aspecial kind of management, different from enterprisemanagement, the nature of public administration ismainly services for the public, under these conditions,the purpose of public administration is not to profitbut to enhance service levels. Public administration asa topic of management also lies in its prominentfeature, namely the development and implementationof public policy. In that case, the government achievesthe purpose of regional knowledge managementthrough these policies. The government should timelygrasp global development trend of knowledge innova-tion, transforming from governer into service role tocreate high-quality investment environment, guidegovernment’s administration and private investmentdirection, and fully appreciate the needs, build acomplete infrastructure system for knowledge manage-ment to provide fast efficient service and knowledgeflow mechanism to improve the regional competitiveadvantage.

5. Conclusions and discussion

Regional knowledge management is different from theenterprise knowledge management because of the

characteristics of the region. This study analysesregional knowledge management from the perspectiveof management theory, and claims that planning ofregional knowledge management is implementedmainly through the regional science and technologypolicy, inluding basic scientific research programme,new technological revolution programme, foresightprogramme, R&D programme and regional coopera-tion programme. The overall regional scientific andtechnological development planning guides the devel-opment of regional science and technology, and makesthe region integrate into the globalisation system, anddevelop unique competitive advantages. Organisingfunction of regional knowledge management isachieved through regional innovation system, and thecontrol of regional knowledge management is the onlyway to correct failure and form a complete regionalspatial system, leadership of regional knowledgemanagement is the role of government, which isdifferent from the enterprises’ leadership, and has aspecial position of service.

In addition to four major management functionsof planning, organising, control and leadership,regional knowledge management also needs motiva-tion management and communication managementfunctions. For example, encourage intellectuals toengage in science and technology R&D and knowl-edge creation through personnel policy. For instance,Silicon Valley innovation region has good talentmechanism attracting a large number of internationaltalents, and Taiwan’s Hsinchu and India’s Bangaloreattract the return of brain drains through incentivepolicy. Communication function of regional knowl-edge management is a management tool that cannotbe ignored, for example, universities and enterprisesneed knowledge exchange, enterprises’ R&D needs touse science and technology resources of universitieswhile it cannot interfere with basic scientific researchof universities, here is a need for communication tomanage.

In short, regional knowledge management needs touse management functions of planning, organising,control and leadership to manage regional knowledgeassets and knowlege activities. It is worth noting thatknowledge asset management at the regional levelmainly means the establishment of public knowledgemanagement system, such as libraries, publishing anddistribution agencies, archives, museums, etc. (Qiuet al. 2005), as well as regional information platformand information network management, includingallocation, control, management, development andutilisation of national knowledge resource. And themore important of regional knowledge management isthe establishment of environment that is conducive toknowledge innovation, proliferation and spillover

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through the adoption of management tools accordingto the characteristics of knowledge activities (Zhao2006, 2007).

Knowledge management and regional managementis still developing, this study takes regional knowledgemanagement, a new issue of science, as topic todevelop the theory in the absence of colleagues’ pre-start study, some lacks are inevitable, some points ofcontents need improvement. Chinese scholars in theUnited States recommended for the National People’sCongress in 2005 in terms of the juridification ofknowledge dominant nation strategy, and claimed thatChinese public administration system should beadjusted in using knowledge-based, service-orientedand enterpise-oriented government system. China’sruling party and government departments shouldimplement the development strategy of knowledgeand three practices of government knowledge manage-ment, learning government and government innova-tion R&D, and plan and establish knowledgemanagement system of public administration and threesubsystems inculding government knowledge innova-tion and creation, government knowledge dissemina-tion and sharing, government knowledge applicationand added value. Obviously, this issue is not only amanagement issue, but also a social issue. How toestablish a knowledge management-oriented govern-ment, and the structural characteristics of this govern-ment is not discussed in this study.

In order to avoid lack of in-depth insight and resultin superficial diagnosis on problems in terms ofregional knowledge production, knowledge flow andvalue realisation when making policy, and to enhancethe efficiency of regional knowledge management, thefollowing aspects should be studied further in thefuture:

. Difference between public knowledge productionand private knowledge production;

. Mode and approach of regional knowledgemanagement;

. Coordination mechanisms of knowledge net-works, social capital and regional knowledgecirculation;

. Ability and modes of government institutionallearning;

. Regional cultural industrialisation;

. Regional strategies responsing to globalisationand information technology.

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