How to cite:

Dian Alanudin (2024) Exploring The Strategic Role of Knowledge Transfer in Fostering Continuous

Innovation and Competitive Advantage in Indonesia Creative Industry 4.0, (06) 08,

E-ISSN:

2684-883X

EXPLORING THE STRATEGIC ROLE OF KNOWLEDGE TRANSFER IN

FOSTERING CONTINUOUS INNOVATION AND COMPETITIVE ADVANTAGE IN

INDONESIA CREATIVE INDUSTRY 4.0

Dian Alanudin

Institut Teknologi dan Bisnis Jakarta, Indonesia

Email: [email protected]

Abstract

In Indonesia's Creative Industry 4.0, effective knowledge transfer is crucial for fostering

continuous innovation. Despite the country's cultural richness, the transfer of knowledge

within the creative sector remains suboptimal, hindering growth and innovation. Tacit

knowledge predominantly resides within individuals, limiting dissemination within

organizations and resulting in the loss of heritage and creative assets. However, amidst these

challenges, significant opportunities exist, Indonesia's creative industry, with notable unicorns

and a large workforce, has the potential for economic growth and development. Yet, the

transition to Industry 4.0 demands enhanced knowledge transfer capabilities. While Industry

4.0 presents opportunities for Indonesia to compete globally, effective knowledge transfer

remains limited. This study aims to address this gap by investigating the nature and

consequences of knowledge transfer within Indonesia's creative industry, with a focus on

fostering continuous innovation. By prioritizing knowledge transfer and leveraging ICT and

HRM resources, firms can enhance their competitive advantage and performance in the

dynamic landscape of Industry 4.0. Through this research, insights are provided to facilitate

sustained growth and innovation in Indonesia's creative industry.

Keywords: Knowledge transfer, continuous innovation, knowledge creation, creative industry

4.0

INTRODUCTION

Indonesia is the world's biggest archipelago, with 17,508 islands populated by over 360

ethnic groups. Indonesia is rich in cultural diversity and customs, with a very stunning natural

landscape, accompanied by a variety of excellent gastronomic pleasures. This is one of the

main factors supporting the creative industry in Indonesia that should be able to grow and

develop optimally (van den Broek et al., 2021). However, this is difficult to happen because

the archiving and transfer of knowledge from one generation to the next is not going well.

This phenomenon is also reflected in the Indonesian creative industry. knowledge is still in

the individual as tacit knowledge has not resided in the company or organization. Knowledge

transfer within and between organizations in Indonesia's creative industry 4.0 is still lacking.

The primary transfer of knowledge occurs between individuals (tacit to tacit) or between

individuals and organizations (tacit to explicit). Individuals still have intrinsic knowledge,

skills, and abilities that cannot be adequately developed and distributed in the creative

business. 4.0. It is not adequately distributed and transferred inside the company or

organization (Argote & Ingram, 2000). Changes in the knowledge or performance of recipient

JOURNAL SYNTAX IDEA

p–ISSN: 2723-4339 e-ISSN: 2548-1398

Vol. 6, No. 08, Agustus 2024

Exploring The Strategic Role of Knowledge Transfer in Fostering Continuous Innovation and

Competitive Advantage in Indonesia Creative Industry 4.0

Syntax Idea, Vol. 6, No. 08, Agustus 2024 3793

units can indicate that organizational knowledge, such as routines or best practices, has been

transferred. Transferring organizational information, such as best practices, can be a tough

task. This phenomenon has resulted in a lot of heritage and creative assets being lost and

cannot be optimally developed and disseminated for the expansion of creative industry 4.0.

These conditions make it difficult to preserve and innovate in a sustainable manner for the

organizations. For example, the extinct traditional food recipes, the extinction of batik skills,

or the creativity of making digital films are not transferred, developed, and reside in the

organization (Casadesus‐Masanell & Zhu, 2013).

Besides all the obstacles, live beneath the opportunities and challenges behind them.

Indonesia's creative industry in the industrial era 4.0 is still promising. Although it is not an

easy task to create a knowledge transfer to increase the capabilities and competitive advantage

of an organization, this fundamental asset is needed to create many opportunities. Industry

creative is thick with idea creation and creation in creating and developing products and

services. because the character of the industry emphasizes creativity, knowledge is often in

tacit knowledge and not disseminated into explicit knowledge (Krishnamoorthi & Mathew,

2018).

Indonesia has one decacorn (Go-Jek) and four unicorns: Ovo, Tokopedia, Bukalapak,

and Traveloka. Furthermore, Indonesia employs 17 million people in the creative industry

sector. As an inclusive economy, creative economy 4.0 has the ability to generate and enhance

wealth, improve quality of life, and promote human development. According to the findings

of these projects, businesses all over the world should begin to shift their perspectives on the

world today in order to support continuous innovation in the world of future (Mikalef et al.,

2020). Successful discovery, management, and the ability to transfer knowledge within and

across the company are growing. Nonetheless, corporations are not adequately prepared for

this challenge, much alone enter industry 4.0. Finally, in the new future brought about by the

fourth industrial revolution, success is defined by information transmission and management.

Furthermore, most businesses, whether large and small, have already recognized the value of

information transfer (Ferreira Moutinho, 2016). Companies in the creative industry 4.0

recognize knowledge transfer as a critical competence that adds value. Optimizing the

utilization of knowledge transfer through talents, abilities, and information is one strategy to

enhance Indonesia's creative industry 4.0, allowing them to compete worldwide (Nambisan,

Zahra, et al., 2019).

Knowledge transfer is indispensable for the sustainability of product and service

development in the creative industry 4.0. through interconnection, world knowledge transfer

should be facilitated with the assistance of technology. In addition, by increasing human

intelligence, and the ability to produce creative ideas obtained through experience, the

inability to knowledge transfer can be minimized.

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3794 Syntax Idea, Vol. 6, No. 08, Agustus 2024

Figure 1. Indonesia five sectors priority with regional competitiveness

Figure 2. The Five Sectors “Making Indonesia 4.0”

The five industries highlighted in Indonesia's "making 4.0" initiative are all critical to

the global economy, and Indonesia must become a big player in these sectors. The

aforementioned "Making Indonesia 4.0" roadmap lists five sectors as priority sectors: food

and beverage, automotive, textiles, electronics, and chemicals. Thus, these sectors are

predicted to boost the country's exports in the future and promote the growth of the

manufacturing sector's contribution to Indonesia's GDP. All parties must commit and work

together to achieve the road map's success. Knowledge transfer is important to industry 4.0

and the new digital economy. Knowledge transfer is becoming increasingly common and

important, as are the opportunities that come with it (Nambisan, Wright, et al., 2019).

Adequate competencies and technologies are essential for catching up with these new

prospects. Organisations must adopt creative techniques and ways of thinking in order to

establish and sustain a competitive advantage. This means that organizations must be able to

use new capabilities, such as advanced technology, modern management methods, or

innovative business strategies, to safeguard and advance the interests of all stakeholders,

including employees, customers, business partners, and shareholders (Sonenshein et al.,

2017). Furthermore, organizations must seek out and capitalize on new market opportunities,

generate additional revenue streams, and provide innovative consumer experiences.

Furthermore, by developing and retaining long-term knowledge, companies ensure that all

parties engaged reap long-term advantages from their efforts, so improving the organisation's

Exploring The Strategic Role of Knowledge Transfer in Fostering Continuous Innovation and

Competitive Advantage in Indonesia Creative Industry 4.0

Syntax Idea, Vol. 6, No. 08, Agustus 2024 3795

market competitiveness. To summarize, the new ecosystem offered by industry 4.0 comprises

new collaborative operational models that use information transfer as insight to make

decisions and increase operating efficiency while supporting continuous innovation. With the

amount of information flow in Industry 4.0, businesses require new competencies in this

increasingly interconnected environment. One such skill is knowledge transmission in

Indonesia's creative 4.0 (Teece, 2010).

From these viewpoints, the researcher perceives many hurdles, problems, and

opportunities in the Indonesian creative industry 4.0 phenomena. Individuals still have

intrinsic knowledge, skills, and abilities that cannot be adequately cultivated and transmitted

to enhance the creative sector. 4.0. Knowledge transmission is not sufficiently

institutionalized inside the enterprise or organization. Important factors, such as tacit and

explicit knowledge, as well as internal and external resources to assist knowledge transfer in

the creative 4.0 business, are still underdeveloped. Crucial resources such as information and

communication technology (ICT) and human resource management (HRM) remain

underexplored in the creative business, resulting in undeveloped knowledge transmission.

Furthermore, the promising nature of Indonesia's creative industry 4.0 provides numerous

prospects for growth and overcome a critical gap, namely the strategic role of knowledge

transfer in establishing a new competitive advantage and sustaining growth through constant

innovation. This situation is at the heart of the key issue that will enable Indonesia's creative

industry 4.0 to contribute more to the country's GDP through value creation while also

promoting a long-term influence on the three bottom lines: people, environment, and profit.

From the phenomenon explained above, the lack of knowledge transfer in the creative

industry 4.0 induces difficulties in fostering continuous innovation, this event is the focus of

this study. These knowledge transfer processes as intangible assets that are crucial to enhance

the firm competitive advantage in creative industry 4.0 through continuous innovation.

Knowledge transfer is an important competency to create and foster opportunity creations and

in the end, will be enhancing continuous innovation. Without this capability and skills, the

firms will find difficulty in developing continuously and sustaining growth in industry 4.0.

The purpose of this study is to contribute to knowledge transfer and innovation area

through investigating the nature of this new capability that leads to certain knowledge and

innovation activities and its consequences to the industry 4.0 firms' competitive advantage

performance. Furthermore, this study also sheds light on implementing knowledge transfer of

innovation practice in industry 4.0 companies. These efforts are trying to extend and integrate

our understanding of knowledge transfer through new phenomena and perspectives, especially

in Indonesia’s creative industry 4.0.

The way the company optimizes and maximizes the use of knowledge in fostering its

continuous innovation in industry 4.0 is crucial for the company to cope with the turbulent

environment nowadays. There are several competencies needed in utilizing knowledge

transfer to improve continuous innovation activities in industry 4.0. This study aims at

investigating and raises a research question: “How does knowledge transfer contribute to

fostering continuous innovation and creating competitive advantage in Indonesia's Creative

Industry 4.0?” This research consists of three sections that start with the introduction that

explains the phenomenon as a background and the importance of this study. Secondly, discuss

the conceptual and theoretical framework used in this study starting from the field of the

research, grand theory, up until the derived proposition approach and discusses the theoretical

proposed model development. Finally, the last section discusses the conclusions remarks of

this research

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RESEARCH METHOD

This study employs a qualitative approach using a case study method to gain an in-depth

understanding of the phenomenon of knowledge transfer within Indonesia's creative industry

in the era of Industry 4.0. This approach allows for an in-depth exploration of the processes,

challenges, and opportunities associated with knowledge transfer within creative

organizations. The research adopts an exploratory design aimed at identifying and

understanding the factors influencing the effectiveness of knowledge transfer. The case

studies focus on creative companies in Indonesia that have implemented elements of Industry

4.0, including the use of information and communication technology (ICT) and innovative

human resource management (HRM).

Based on the knowledge transfer in fostering continuous innovation in the context of

knowledge and innovation research as well as the theoretical discussed above, in this section,

the propositions are developed based on the previous study in the literature to address the

research question mention in introduction section. The proposed model is based on the

theories presented in figure 2.4. In this model, knowledge creation performs as the mediation

of knowledge transfer and continuous innovation. In the end, competitive advantage is a

consequence output. Therefore, in this context, we formalize the circumstances into

proposition as follow:

Figure 3. The research model and the derived propositions

Proposition 1: Knowledge transfer will foster continuous innovation through knowledge

creation in creative industry 4.0.

Knowledge transfer is a powerful strategy of producing desired continuous innovation

behaviors among employees, and hence can be expected to contribute to the establishment of

competitive advantage (Demartini et al., 2015). According to Nonaka et al., (2006),

Organizations with knowledge transfer competencies will make prudent use of resources,

making them more inventive and performing better through knowledge production.

Organizations would struggle to produce continuous innovation if knowledge transfer is not

managed properly. Knowledge transfer is a coordinated mechanism that converts information

and knowledge into useful products and services. Start from socialization in individual tacit

knowledge through all the spiral of knowledge creation will boost the knowledge transfer

capability and proses to achieve continuous innovation (Wehn & Montalvo, 2018)

Proposition 2: Knowledge transfer will create competitive advantage through continuous

innovation in creative industry 4.0.

There are three main factors in knowledge transfer that should be settled before it can

foster continuous innovation directly. It is the willingness to transfer knowledge behavior: (1)

Attitude towards knowledge transfer, (2) pressure to transfer knowledge, and (3) control over

Exploring The Strategic Role of Knowledge Transfer in Fostering Continuous Innovation and

Competitive Advantage in Indonesia Creative Industry 4.0

Syntax Idea, Vol. 6, No. 08, Agustus 2024 3797

knowledge transfer (Wehn & Montalvo, 2018) . Knowledge transfer is capable of supporting

management decisions and fostering continuous innovation function properly when all of this

behavior is resided and exists in the organizations. Knowledge transfer processes and tools

within the organization are broadly acknowledged, monitored, and updated. Knowledge

transfer architecture allows all stakeholders in the organization's extended value chain to share

data and information, as well as knowledge and experience. The organization's present

knowledge transfer processes are sufficient to support the everyday work, and particularly

reward information sharing to strengthen and nurture ongoing innovation throughout the

business and among organizations (Nonaka et al., 2006). The organization specifically

rewards knowledge transfer and blended this behavior with continuous innovation tend to

achieve and foster competitive advantage (Li & Gao, 2003) (Li & Gao, 2003)

Proposition 3: Knowledge transfer will create competitive advantage through knowledge

creation in creative industry 4.0.

Knowledge transfer through knowledge creation will be succeeded in creating and

sustaining the competitive advantage (Li and Fei Gao, 2003; Nonaka et al. 2006). To create

and sustain its competitive advantage in the long term, a company must first have knowledge

transfer function properly, and that knowledge creation can create the future goods and

services (Li and Fei Gao, 2003). With these conditions, the opportunities are discovered,

evaluated, and exploited. At the end, competitive advantage can be created. The pool of

corporate knowledge, in this case, is knowledge about strategy, organizational structure, and

operational to create product and services. This knowledge is, for the most part, diverse and

form as tacit knowledge. This is the source for a company to achieve a competitive advantage

(Wang, 2014). To conclude, the understanding derived proposition three, knowledge transfer

will be fostering competitive advantage through knowledge creation

RESULT AND DISCUSSION

This study adds to existing knowledge about knowledge transfer and continuous

innovation by developing a proposition to achieve competitive advantage. To improve

knowledge transfer and continuous innovation in the creative industry 4.0 and create a

competitive advantage, companies must be able to manage their tacit knowledge. The

organization cannot generate knowledge by itself. Individual tacit knowledge serves as the

foundation for the development of organizational knowledge. Knowledge transfer is the

process of leveraging existing knowledge and finding existing and accessible knowledge.

Organizational knowledge generation is a spiral process that begins at the individual level and

advances through broader communities of interaction that span sectional, departmental,

divisional, and organizational borders. To have an effective knowledge transfer in the creative

industry 4.0, firms need to build knowledge-creation to enhance their continuous innovation.

Besides, knowledge transfer can also create a competitive advantage through continuous

innovation in creative industry 4.0. There are three main factors in knowledge transfer that

should be settled before it can foster continuous innovation directly. It is the willingness to

transfer knowledge behavior: (1) Attitude towards knowledge transfer, (2) pressure to transfer

knowledge, and (3) control over knowledge transfer.

The conclusion of this study shows that knowledge transfer can drive sustainable

innovation through knowledge creation in creative industries 4.0. Companies that focus on

knowledge creation are able to explain how the creative sector generates and maintains the

dynamics of continuous innovation in work processes, product development, and

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3798 Syntax Idea, Vol. 6, No. 08, Agustus 2024

organizational adaptation. Learning and the cultivation of awareness among all members

drives organizational efforts to continuously exploit every potential resource available,

whether individually, collectively, organizationally, or society. Given the abundance of tacit

knowledge in people, dynamic organizational action seeks to mobilise this valuable resource,

which then becomes the engine driving incremental and radical innovation, and gives

businesses a competitive advantage.

As a continuation of this process, companies in creative industries 4.0 need to develop

strategies that focus not only on the exploitation of existing knowledge, but also on the

exploration of new knowledge. This includes investments in research and development

(R&D), the establishment of partnerships with educational institutions, and active

participation in the global innovation ecosystem. By strengthening a culture of adaptive and

collaborative learning, companies can continue to generate new ideas and face challenges that

arise as technology evolves and markets change. In addition, it is important for companies to

build systems that support the horizontal and vertical flow of knowledge within the

organisation, so that knowledge is not only accumulated at a certain level, but also spread and

integrated throughout the company. Thus, knowledge transfer becomes key in maintaining the

competitiveness and relevance of the company in the era of the ever-evolving creative

industry. This study identifies the dimensions underlying knowledge transfer and continuous

innovation. This study highlights the synergistic effect of knowledge transfer and continuous

innovation on firms' competitive advantage. The purpose of this research is to answer the

research question on “How to enhance knowledge transfer in the creative industry 4.0 to

fostering continuous innovation?”

In terms of management consequences, businesses must first define a vision and goal,

and then connect them to all of the unique resources linked to knowledge transfer and

dissemination in order to support ongoing innovation. This will generate growth, which can

lead to long-term firm competence. Future research could examine the impact of knowledge

creation on business model innovation, and subsequent studies can address the role of

knowledge creation in relation to business model innovation holistically and longitudinally.

CONLUSSION

The study concludes that effective knowledge transfer is essential for fostering

continuous innovation in the creative industry 4.0, emphasizing the importance of managing

tacit knowledge as the foundation for organizational knowledge creation. Knowledge transfer,

which involves utilizing and identifying accessible knowledge, is crucial for driving

innovation and creating a competitive advantage. Key factors for successful knowledge

transfer include attitude towards it, pressure to transfer, and control over the process. The

dynamic process of knowledge creation starts at the individual level and expands through

organizational levels, contributing to sustained innovation in processes, product development,

and adaptation. Organizations that effectively mobilize tacit knowledge can drive incremental

and radical innovations, gaining a competitive edge. The study highlights the synergistic

relationship between knowledge transfer and continuous innovation, suggesting that this

interplay is vital for enhancing firms' competitive advantage. For managerial practice, the

research recommends linking organizational vision and mission with unique knowledge

resources to facilitate knowledge transfer and creation, fostering continuous innovation and

long-term competence. Future research could further explore the impact of knowledge

creation on business model innovation in a holistic and longitudinal context.

Exploring The Strategic Role of Knowledge Transfer in Fostering Continuous Innovation and

Competitive Advantage in Indonesia Creative Industry 4.0

Syntax Idea, Vol. 6, No. 08, Agustus 2024 3799

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