At various stages of civilization over the past five thousand years, successions of factors have formed bottlenecks on the efficiency of human beings, threatening to repress the growth of civilization. Upto the end of 1800s, limits on amount of available arable land caused problems as populations were growing and there were more mouths to feed. Then as large-scale manufacturing came into existence, urban labours became the most valuable asset. Following technological breakthroughs, machinery came into picture of production and it began to improve the automation and industry had no longer to depend on labors to that extent. But due to investment in machinery, capital became all-important. Controlling flow of capital was foremost problem for the industrialists at that time and suddenly capital became the bottleneck to efficiency.

While traditional three factors of production – Land, Labour and Capital – have become easier to handle, in 21^st century, a fourth factor is increasingly and fast becoming a hurdle or bottleneck for companies to grow. This is "Knowledge", which is at the heart of much of today’s global economy and managing knowledge has become vital for companies success.

Knowledge can be defined as a fluid mix of experience, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information.

Knowledge is information in action. Knowledge is what people in an organization know about their customers, products, processes, mistakes, and successes.

Unlike the conventional Material assets, which decrease as they are used, Knowledge asset increases with use; Ideas breed new ideas, and shared knowledge stays with the giver while it enriches the receiver.

Explicit knowledge: It is the visible knowledge available in the form of letters, reports, memos, literatures, etc. Explicit knowledge can be embedded in objects, rules, systems, methods etc.

Tacit knowledge: It is highly invisible and confined in the mind of a person. It is hard to formalize and therefore, difficult to communicate to others. A master craftsman after years of experience develops a wealth of expertise ‘at his fingertips’. But he is often unable to articulate the scientific or technical principle behind what he knows. Transformation of knowledge from tacit to explicit form increases its usability and visibility. Capturing the experts Tacit Knowledge that resides within him in the form of Know-how and insights is a very difficult and challenging task.

While tacit and explicit type of knowledge is only a way to dissect the field, in reality the situation is more complicated. The above two categories are so heavily interlinked that such a bipolar map is not easy to draw in practice. For example, to understand completely a written document i.e. explicit knowledge, it often requires a significant amount of experience i.e. tacit knowledge. A sophisticated recipe is meaningless to someone who has never stood in kitchen or a diagram of machines is indecipherable without an engineering background.

Knowledge Management is a process that, continuously and systematically, transfers knowledge from individuals and teams, who generate them, to the brain of the organisation for the benefit of the entire organisation. It is the systematic, explicit, and deliberate building, renewal, and application of knowledge to maximize an enterprise's knowledge-related effectiveness and returns from its knowledge assets.

Few other ways to define KM are,

	Capturing, storing, retrieving and distributing tangible Knowledge Assets such as copyrights patents and licenses.
	Gathering, organizing and disseminating intangible knowledge, such as professional know how and expertise, individual insight and experience, creative solutions and the like, brands, technology.
	Creating an interactive learning environment where people readily transfer and share what they know, internalize it and apply it to create new knowledge.