Transformation of technology in its existing form and value-added activities

Summary form only given. In order to bridge the gap between traditional value-added activities chain and knowledge development, this paper attempts to introduce a new concept of "knowledge transformation chain" by examining the existing forms of knowledge, the changes of interaction pattern between these forms and the linkages of value-added activities and the transformation of knowledge in its existing forms. The theoretical investigation of this paper reveals technology exists in three forms instead of traditional two forms, i.e. hardware and software. The medium form technology, which is mainly in the form of design, written documents and other medium outputs of materialising human concepts, is expanding. Secondly, the pattern of knowledge transformation has shown a dramatic change due to the burgeoning of the medium form technology. A multi-stage and multi-path knowledge transformation process has replaced the traditional static and one-step process. Thirdly, applying the concept of knowledge transformation chain to physical value-added activities model, a firm's value creation process can be seen as the fabrication of a value net by weaving the three forms of knowledge into a functional activities chain in a firm. On the one hand, knowledge transformation process affects a firm's value-added activity selection. On the other hand, a firm's value-added activity affects its knowledge transformation chain interact with those of other firms.