Quantifying knowledge and why it matters for new companies

Photo by Samson Creative. on Unsplash
Figure 1: Using the work histories of more than 30 million employees of the formal sector economy of Brazil for a period of 10 years, we can quantify how much industry-specific knowledge and how much occupation-specific knowledge a pioneer firm has. If the firm hires people from related industries, it has a lot of industry-specific knowledge, and if it hires people from the same or from similar occupations, it has a lot of occupation-specific knowledge.
Figure 2: Based on the mobility of workers between pairs of industries (left) and pairs of occupations (right) we can infer how related two industries and two occupations are. This quantity reveals a network of knowledge-relatedness.
Figure 3: The chance of survival depends much more on the level of industry-specific knowledge that the pioneer firm has than on its level of occupation-specific knowledge. The curve for the survival rate of pioneers with high levels of industry-specific knowledge remains higher than the curve for the survival rate of pioneers with low levels of industry-specific knowledge (left), while the curves for the survival rates of pioneers with different levels of occupation-specific knowledge pretty much track each other (right).

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Cristian Jara-Figueroa

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PhD student at the MIT Media Lab working on the economic value of knowledge and its implications for regional industrial diversification. @Cristian_jf

MIT MEDIA LAB

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