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on Knowledge Management and Knowledge Economy |
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Issue of 2025–06–16
four papers chosen by Laura Nicola-Gavrila, Centrul European de Studii Manageriale în Administrarea Afacerilor |
| By: | Fasheng Xu; Jing Hou; Wei Chen; Karen Xie |
| Abstract: | The adoption of GenAI is fundamentally reshaping organizations in the knowledge economy. GenAI can significantly enhance workers' problem-solving abilities and productivity, yet it also presents a major reliability challenge: hallucinations, or errors presented as plausible outputs. This study develops a theoretical model to examine GenAI's impact on organizational structure and the role of human-in-the-loop oversight. Our findings indicate that successful GenAI adoption hinges primarily on maintaining hallucination rates below a critical level. After adoption, as GenAI advances in capability or reliability, organizations optimize their workforce by reducing worker knowledge requirements while preserving operational effectiveness through GenAI augmentation-a phenomenon known as deskilling. Unexpectedly, enhanced capability or reliability of GenAI may actually narrow the span of control, increasing the demand for managers rather than flattening organizational hierarchies. To effectively mitigate hallucination risks, many firms implement human-in-the-loop validation, where managers review GenAI-enhanced outputs before implementation. While the validation increases managerial workload, it can, surprisingly, expand the span of control, reducing the number of managers needed. Furthermore, human-in-the-loop validation influences GenAI adoption differently based on validation costs and hallucination rates, deterring adoption in low-error, high-cost scenarios, while promoting it in high-error, low-cost cases. Finally, productivity improvements from GenAI yield distinctive organizational shifts: as productivity increases, firms tend to employ fewer but more knowledgeable workers, gradually expanding managerial spans of control. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.00532 |
| By: | Moreno, William |
| Abstract: | Representing and reasoning with complex, uncertain, context-dependent, and value-laden knowledge remains a fundamental challenge in Artificial Intelligence (AI) and Knowledge Representation (KR). Existing frameworks often struggle to integrate diverse knowledge types, make underlying assumptions explicit, handle normative constraints, or provide robust justifications for inferences. This preprint introduces the Conditional Reasoning Framework (CRF) and its Orthogonal Knowledge Graph (OKG) as a novel computational and conceptual architecture designed to address these limitations. The CRF operationalizes conditional necessity through a quantifiable, counterfactual test derived from a generalization of J.L. Mackie's INUS condition, enabling context-dependent reasoning within the graph-based OKG. Its design is grounded in the novel Theory of Minimal Axiom Systems (TOMAS), which posits that meaningful representation requires at least two orthogonal (conceptually independent) foundational axioms; TOMAS provides a philosophical justification for the CRF's emphasis on axiom orthogonality and explicit context (W). Furthermore, the framework incorporates expectation calculus for handling uncertainty and integrates the "ought implies can" principle as a fundamental constraint for normative reasoning. By offering a principled method for structuring knowledge, analyzing dependencies (including diagnosing model limitations by identifying failures of expected necessary conditions), and integrating descriptive and prescriptive information, the CRF/OKG provides a promising foundation for developing more robust, transparent, and ethically-aware AI systems. |
| Date: | 2025–05–05 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:zwpnv_v4 |
| By: | Goutsmedt, Aurélien (UC Louvain - F.R.S-FNRS); Sergi, Francesco; Acosta, Juan |
| Abstract: | What do economists do in central banks? Why do central banks hire economists? This book investigates the evolving role of economists and economic knowledge within central banks, arguing that their current centrality is neither self-evident nor historically inevitable. While the presence and influence of economists in central banks today may seem natural, this book shows that it is the result of a complex, gradual, and uneven historical process shaped by institutional structures, disciplinary transformations, and shifting relationships between science and policy. Drawing on a rich but dispersed body of literature, the book traces how economists progressively gained authority through the establishment of statistics departments, the adoption of macroeconometric models, and the emergence of a shared cognitive infrastructure between academia and central banks. Rather than focusing on individuals or doctrines, it examines general trends and institutional shifts across a series of national case studies to show how central banks function as boundary organizations, at the intersection of policy and science. |
| Date: | 2025–05–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:acymv_v1 |
| By: | Rouvinen, Petri; Kässi, Otto; Pajarinen, Mika |
| Abstract: | Abstract Finland’s future prosperity hinges on intangible assets such as software, data, brands, and organizational capital. While research and development (R&D) is a central intangible asset, other types collectively hold greater significance. The growth trajectory of Finland’s intangible investments stalled with the 2008–2009 financial crisis and resumed only after the COVID-19 pandemic. This “lost decade” partly explains Finland’s sluggish economic and productivity performance. Innovation policy should broaden its focus beyond R&D to encompass other forms of intangible investment, as well as the adoption and diffusion of innovations. Policy should prioritize quality over quantity, encourage bold experimentation, and support scaling. This necessitates a shift towards equity financing and fostering skilled labor mobility. Mergers and acquisitions are vital for leveraging and disseminating intangible capital, but anti-competitive “killer acquisitions” are not in the national interest. |
| Keywords: | Intangible capital, Investments, Productivity, Innovation policy, Economic growth, Spillovers |
| JEL: | D24 E22 G32 O34 |
| Date: | 2025–06–05 |
| URL: | https://d.repec.org/n?u=RePEc:rif:report:164 |