**2. Transformation from knowledge economy to innovative economy**

The transformation of "traditional heavy industry" into the technological development‐oriented economy proceeded in the middle of 1980s in twentieth century [11]. The economic period of knowledge economy has influenced organizational changes in strategies, structures, and management styles [12].

The emergence of the Internet in the early 1990s of the twentieth century (period of the Internet or digital economy) has influenced the rise of the third wave of capitalism. The Internet launched the new institutional revolution in the globe. Consequences have been seen in increasing the importance of networks and crowds in relation to market institutions. Internet revolution is based on a population size (N), the resources feeding supply sub‐system (F) encompassing both the natural resources and food system, and accumulated technological and scientific knowledge sub‐system (K). The key factors N‐F‐K have an important influence on human development and economic growth [13].

The technological development forces organizations that are based on the Taylors paradigm hierarchy into the changes of the business processes that consequently lead to the changes of the organizational structures. Organizations must have in mind that their role in a new "smart technological capitalistic" era will be not only to provide the development of a high‐ tech information and communication technologies, but also to support the social innovative projects and thus have an impact on social and economic development of the society [14].

During the time of economic crisis (2008–2009), the first signs of changes in business models occurred. Innovation companies gave an answer how to increase the economic growth in last few years. Entrepreneurs have begun to open up a start‐up technology companies related to the development of online platforms and digital technologies [15]. The launching of a new business models based on the Internet and digital technologies affected in last few years due to the changes in the consumer behavior. The fast Internet connections and mobile technologies enable the development of the trading and sharing platforms (e.g., Airbnb, Backfeed, Fairmondo, Uber, Tapaz, etc.). Digital platforms enable individuals and business operating in real time via the Internet, which increases the range of potential customers and due to the nature of the business reduces the cost of marketing and business resulting in lower prices for goods and services [16].

Managers and leaders should be aware also of the knowledge negative aspects, because it can cause economic crisis. Control of the knowledge resources and prevent sharing of knowledge and information have a negative impact on the development of innovative society. Cause is the large gap between developed and emerging countries [17]. Pagano and Rossi [18] claim that the cause of the crisis lies at the monopoly of developed countries over intellectual rights. International agreements on trade‐related aspects of intellectual property have caused a rise in the cost of investments in countries that had neither abundant inexpensive labor nor high amounts of intellectual property. The authors believe the solution to the crisis, besides changes in monetary policy, financial regulation, and standards of Keynesian economic policy, also needs a measure that will reduce the intellectual monopolization of the economy.

The innovative economy that succeeded knowledge economy introduces new approaches for the development of business models in the process of organizational evolution. The innovative smart Internet connected technologies become a system for creating and distributing the knowledge and as such they have characterized firms and many other social systems [19]. The main factor for the development of the entrepreneur idea is not any more the financial capital but a social capital, because products or services are a result of knowledge that is based on innovative ideas by either individuals or teams [20]. Knowledge and information have become a key factor for success in the knowledge economy as an innovative economy [21].

It is necessary for the development of an innovative environment to facilitate access to venture capital (e.g., crowdsourcing, kickstar, venture capital funds, etc.) and move on to the new forms of cooperation that are based on short term relations for which the duration depends on the project timeframe, provide tax relief for R&D, enhancement of intellectual property rights (patents and licenses), and facilitation of the networking organization that facilitates cooperation among businesses (e.g., clustering).

### **2.1. Industry 4.0 and rise of Internet of Things**

decision‐making processes [6]. With launching the Web 2.0 and social media, these processes are running outside the organization [7]. According to the fast adoption of the social media platforms and mobile applications in the last 10 years, organizations have faster (in real time) and easier access to the knowledge that is created in human living environment [2]. The Internet transformation of the digital industry is still in progress; the artificial intelligence, big

The concept of Industry 4.0 has launched the fourth technological revolution, which is based on the concepts and technologies that include cyber‐physical systems, the Internet of Things (IoT) and the Internet of Services (IoS). Industry 4.0 is based on perpetual communication via Internet that allows a continuous interaction and exchange of information, not only between humans and machines, but also between the machines themselves [9]. This communication interaction influences the establishment knowledge management 4.0. The trend of the social customer relationship management (social CRM) for an emergent concept that integrates classical customer relationship management (CRM) and social media is leading toward the establishment of a communication channel for the continuous exchange of information about the needs and individual situations in real time to e‐retailers, healthcare, manufacture, house-

This chapter has focused on better understanding of the impact of the Internet of Things on organizational changes in knowledge‐intensive organizations. The contribution of the article

The transformation of "traditional heavy industry" into the technological development‐oriented economy proceeded in the middle of 1980s in twentieth century [11]. The economic period of knowledge economy has influenced organizational changes in strategies, structures, and man-

The emergence of the Internet in the early 1990s of the twentieth century (period of the Internet or digital economy) has influenced the rise of the third wave of capitalism. The Internet launched the new institutional revolution in the globe. Consequences have been seen in increasing the importance of networks and crowds in relation to market institutions. Internet revolution is based on a population size (N), the resources feeding supply sub‐system (F) encompassing both the natural resources and food system, and accumulated technological and scientific knowledge sub‐system (K). The key factors N‐F‐K have an important influence

The technological development forces organizations that are based on the Taylors paradigm hierarchy into the changes of the business processes that consequently lead to the changes of the organizational structures. Organizations must have in mind that their role in a new "smart technological capitalistic" era will be not only to provide the development of a high‐ tech information and communication technologies, but also to support the social innovative projects and thus have an impact on social and economic development of the society [14].

**2. Transformation from knowledge economy to innovative economy**

data, and connectivity indicate the certainty of a new round of digital revolution [8].

keeping, coworkers, customers themselves, energy suppliers, etc. [10].

is mainly conceptual.

170 Knowledge Management Strategies and Applications

agement styles [12].

on human development and economic growth [13].

A new concept of German economic policy was formed in Germany in 2011, based on high‐tech strategies named as Industry 4.0 [22]. That concept raised the fourth technological revolution, which is based on the concepts and technologies that include cyber‐physical systems, the Internet of Things (IoT), and the Internet of Services (IoS) [23, 24], based on perpetual communication via Internet that allows a continuous interaction and exchange of information, not only between humans (C2C) and human and machine (C2M), but also between the machines themselves (M2M) [25].

The rise and expansion of Industry 4.0 with its current fundamental concepts (**Table 1**) is based on the assumption of increasing global urbanization [26]. Demographic changes are becoming a challenge for urban renewal and development, which will have to enable the infrastructure of residents for ensuring their quality of life and sustainable orientation [7, 24]. What actually presents the phenomenon of Industry 4.0, and in which parts of the economy and the human environment it is expanding, is probably most evident from the expressions with which it is associated. These fundamental concepts of Industry 4.0 and the explanation of their contents are shown in **Table 1**.

As shown in **Table 1**, in order to create a smart project, smart technologies and devices have been used. A critical component for the success of urbanization and societal development will be a smart technology. It is predicted that the purpose of the technology will be aimed at collecting and analyzing data from the human environment in order to design a circular economy, increase revenues, lower capital spending, improve services, and mobility [9, 27].

An organization needs a developed business‐support infrastructure as a result of initiating partnerships, which allows it access to information, advice, and education. In this model, information is changing and in such a rapidly changing environment, information is not so much important [4].



Source: Ref. [2].

The rise and expansion of Industry 4.0 with its current fundamental concepts (**Table 1**) is based on the assumption of increasing global urbanization [26]. Demographic changes are becoming a challenge for urban renewal and development, which will have to enable the infrastructure of residents for ensuring their quality of life and sustainable orientation [7, 24]. What actually presents the phenomenon of Industry 4.0, and in which parts of the economy and the human environment it is expanding, is probably most evident from the expressions with which it is associated. These fundamental concepts of Industry 4.0 and the explanation

As shown in **Table 1**, in order to create a smart project, smart technologies and devices have been used. A critical component for the success of urbanization and societal development will be a smart technology. It is predicted that the purpose of the technology will be aimed at collecting and analyzing data from the human environment in order to design a circular economy, increase revenues, lower capital spending, improve services, and mobility [9, 27]. An organization needs a developed business‐support infrastructure as a result of initiating partnerships, which allows it access to information, advice, and education. In this model, information is changing and in such a rapidly changing environment, information is not so

importance

self‐organization

personal safety

Self‐organization In manufacturing, processes change in the entire supply

Smart product Products inserted with sensors and microchips that allow

The smart factory will be more intelligent, flexible, and dynamic. Manufacturing will be equipped with sensors, actors, and autonomous systems. Machines and equipment will have the ability to improve processes through self‐ optimization and autonomous decision‐making

Product and service development will be individualized. In this context, approaches of open innovation and product intelligence as well as product memory are of outstanding

and manufacturing chains. These changes will have an impact on changing processes from suppliers to logistics and to the life cycle management of a product. Along with all these changes manufacturing processes will be closely

These changes in supply and manufacturing chains require greater decentralization from existing manufacturing systems. This fits with a decomposition of the classic production hierarchy and a change toward decentralized

communication via the Internet of Things, with each other and with human beings. Cars, t‐shirts, watches, washing powder, etc., are set to become "smart," as their makers attach sensors to their packaging that can detect when the product is being used, and that can communicate with smartphones when scanned. Smart products are eliciting the question of invasion of privacy and consequently

connected across corporate boundaries

of their contents are shown in **Table 1**.

172 Knowledge Management Strategies and Applications

**Expression/fundamental concept Explanation**

Smart factory, smart manufacturing, intelligent factory,

New systems in the development of products and

much important [4].

factory of the future

services

**Table 1.** Fundamental concept of the Industry 4.0 and implementations of IoT.

If management wishes that the new digital business models have an impact on increasing the added value of organizational knowledge, it is necessary to focus on:


It must be realized that today the company due to globalization changes is exposed to more rapid changes in society and nature, which as such have the greatest impact on product development, operations, and ultimately to the success of the company [28]. This change caused the growth of importance of reaction in interaction with the environment in which the entity operates (headquarters, production), as well as the markets in which it sells. This means that the massive classical information passes into custom‐made information known user or target groups of users with high added value [27]. Such information is transformed into specialist advice and continuous monitoring of users, while education is increasingly necessary in the fields of encouraging companies for corporations, informing about the types of cooperation and management of partnership development networks.
