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Author: Walter Fust

Knowledge management and international development – the role of diplomacy


In this chapter, Walter Fust talks about the role of knowledge management, and knowledge for development, in diplomacy. He describes various methods to assess what knowledge should be stocked, and explains the need for managers who are assigned the task of deciding what should be stocked. These decisions need to be guided by principles, or guidelines - referred to as value management.

I was asked to speak to you about knowledge management, knowledge and development, and the role of diplomacy. Combining these words caused me some difficulty! Nevertheless, I decided to organise my presentation into the following three parts: first I will give you some thoughts about knowledge management in general, then I will go to knowledge for development, and in the third part I will address the role of diplomacy.


When we talk about development, we always talk about resources. Two types of resources are usually recognised: renewable resources and non-renewable resources. However, we are convinced that there is a third resource, a resource that grows the more you use it, and that is knowledge. The very essence of international development cooperation is access to knowledge, sharing of knowledge, transfer of knowledge and use of knowledge.

This is why, about 4 years ago, we initiated discussion about knowledge within the World Bank, and, in 1997, we strongly supported their World Knowledge Conference. The reports our delegation brought back from the conference showed that what many people believe is not true: the technical part of knowledge—the technologies—is not the most essential. The most essential part is knowledge management: management of knowledge and management for knowledge. Information and communication technologies (ICT) involve a lot of issues, both for development cooperation and for the world: tele-education, tele-trade, tele-medicine, tele-banking, video-conferencing, etc. But all of these are technical means. You have to provide the information. And information is, let’s say, like the bridge to knowledge—the input for knowledge. I distinguish between management of knowledge—the collection and validation of information, establishment of necessary databases, and so on; and management for knowledge—the use of knowledge for productive means. And at the World Knowledge Conference we were all convinced that you use ICTs to aggregate information, to carry information, to validate knowledge, to use that knowledge for productive knowledge, and that productive knowledge should serve sustainable development.

Nowadays we—some international fora and of course national groups—are discussing some new trends. As I said, one of the outcomes of this conference clearly stated that the technical aspects of knowledge accounted for about 20% of the total importance, but 80% of the importance lies in how you manage knowledge and how you manage for knowledge in order to make use of it. Recently, in companies both national and international, knowledge management has become a kind of a new management understanding or theory. They no longer concentrate solely on capital productivity or on working force issues, but also on managing structural capital.

Personally, I am convinced that not only private, profit making companies need to manage structural capital, but equally foreign ministries and development cooperation agencies need to do so. This involves accounting for strategy, organisation and institutional culture, structures and systems, organisational routine, the experience of previous years and all the procedures. These organisations need to contain and retain knowledge, thus making it the property of the institution. As Thomas Stewart writes in Intellectual Capital: The New Wealth of Organisations, rapid knowledge sharing, collective knowledge growth, shortened lead times and more productive people are all reasons for managing structural capital.

In order to start managing structural capital, in order to recognise what is the structural capital of your organisation, in our experience you must start with simple things. For example, the creation of databases: the use of technology to pull scattered information and wisdom together to convert it into institutional knowledge. Collecting information—stocking the databases, involves a certain financial investment in knowledge management technologies.

What kind of knowledge should be stocked? We started with the creation of a “yellow pages” system. This is a registry of who in our organisation has what experience and expertise, allowing us to validate and gain the maximum benefit from the experience and knowledge of our people. Then, for example, if we need to offer relief services for a disaster in Central America, we can easily see who knows the region very well, who has served there, who has some special knowledge about the cultural environment and who has mastered the Spanish language.

A second method of knowledge management we began four years ago was to create a culture of “lessons learned”. We should not work or continue to work without taking the time to examine lessons learned over a certain period of time. In fact, lessons learned are a precondition, let’s say, for a kind of evaluation before starting the next working phase. Lessons learned provide a kind of guiding line for many other activities. For example, we now recognise that we have to integrate “best practices” into our operations. Best practices cannot be generalised: you cannot equate best practices in one country or regions with best practices in another. In this area you can make use of knowledge about methods, results, and intercultural communication to determine best practices for particular projects in particular areas.

Knowledge management needs knowledge managers. Someone needs to develop ways to stock knowledge and to identify what knowledge we want to stock. This person will be occupied full time with collecting and organising information, collecting knowledge, sharing it, using it and managing it. Breakthrough new ideas need to be sought out and publicised as well as processed; lessons learned need to be documented and an institutional memory needs to be organised. Someone needs to be responsible for managing the content of institutional memory as well as its technology.

A professor at Geneva University, Gilbert Probst, who has developed a working group of people involved in knowledge management, clearly states the structural elements and the key processes of knowledge management as follows. First, the organisation must define what knowledge it needs and produces, and what are the aims, goals and objectives of its knowledge management. This, I believe, may be the most difficult part. Then the organisation must identify the knowledge it needs, ensure the familiarity to develop this knowledge, share it, use it, store it, and evaluate it on a permanent basis. All these processes are in a way interrelated and interactive.

Knowledge management is an essential theme for development cooperation. I would say that the difference between diplomatic work and development cooperation is very often that diplomats tend to collect a lot of information but don’t turn it into knowledge or don’t use it later on in a productive way, as we do in development cooperation.


Through discussion with various colleagues, I came to realise that for an institution such as the Swiss Agency for Development and Cooperation, knowledge management is not enough. It needs a prerequisite, and that is value management. I am deeply convinced that all institutions, even foreign ministries, should know by what values they want to be guided in developing their futures. Even big international companies now recognise that they need value management. A value audit can lead to a set-up of personal values and ideal organisation values: the input for formation of guiding principles or guidelines. Vision, mission and values must be known and communicated as an integral part of an institution’s identity.

What is a value audit? A value audit, according to Richard Barrett and Associates, has the objective of measuring the following: strengths and weaknesses of the existing culture within an institution, degree of alignment between espoused values and actual values, degree of alignment between actual values and staff’s ideal values, degree of alignment between personal and organisational values, and indication of direction and priorities for change.

The SDC carried out a value audit last year with the British consultant, Richard Barrett. Our audit included over 350 people at the headquarters and 150 in 31 countries. The result of that exercise have helped us form our guiding principles and the basic set of guidelines for our strategy development. We can look at where the SDC will stand in 2005 and where we will head for by 2010. But it also showed that we needed to develop a number of additional aspects in order to achieve a good balance. We needed to come forward with some strategic goals. For this we are now developing a “balanced needs scorecard”. This defines strategic goals as related to the authorising environment (be it in parliament or politics, in order to get the financial support; who will provide support in our country in five and ten years time and how do we deal with them), the partner and beneficiaries relations, the organisational culture, society contribution, organisational evaluation over the next ten year, and organisational effectiveness.

Self-understanding is important in our work in development cooperation, and to conceptualise our self-understanding we developed a symbol which we call the “tree of sustainability”. In the planning, evaluation, inspection and explanation of our work this tree of sustainability is the landmark each of our collaborators have to keep in mind. We do not in our work, and I also symbolise this with a plant or a tree, stand by that tree pulling the leaves and think the plant is growing fast. Rather, our work is an external contribution to what our partners want to do, and that external contribution starts in the ground, meaning that we foster the local resources and our partners’ own will. We can motivate them, increase their self-esteem and self-confidence, bring in positive experience, support creativity and autonomy, but we will not get involved in programs or projects where no local resources are mobilised, be it as little as 5% or 10%. If the partner is not willing to engage proper financial means to at some extent, he is not ready to share the risks, he is not ready to bring ownership into it, and he is not ready to make the project sustainable.

On these grounds we specify six basic requirements in order to make our programs and projects work. First, projects must be target oriented: we must be able to reach those groups who want and need to be involved in the project and are ready and willing to contribute. Second, effective organisation must be in place, and if not, we will spend time first on capacity building. Third, financial viability must be demonstrated. It is easy to invest in a project, but more difficult to finance the so-called current expenditure costs or the costs following certain programs. The follow-up costs are the most important ones to consider over the years. For example, if you build a school and the community is not ready to carry the costs for teachers or for maintaining the school, then why build the school? Fourth, the project must use appropriate technology. Fifth, all related decision makers must involved. For example, we found that three years after initiating some water supply schemes in West African, the projects were only 60% successful. We investigated the reasons the projects were not more successful, and found that women had not been involved in the decision making process, yet they were the ones carrying out the agricultural and water supply work. Of course we had to correct this situation. Frequently, especially in everyday life in industrialised countries, the gender approach is not adequately considered. I just returned from Bosnia where I had discussions with the people responsible for developing new laws in Bosnia. I asked, to their surprise, whether they had considered the gender approach, and they replied that they didn’t have the financial means to start such a project. We provided the financial means, and are now waiting to see the results. The sixth requirement is realistic project conception.

Another important dimension of development cooperation and knowledge management is human resources development, which is related to knowledge transfer and capacity building. Poverty is linked to the lack of knowledge. Knowledge gives people greater control over their destinies. You all know the saying “knowledge is power”: the more knowledge you have, the more power you have. Perhaps here lies the biggest role for international cooperation in the future, as financial means are not being substantially increased recently. Development cooperation should concentrate its efforts on creating a real partnership: information should not be a one way road, but should generate a dialogue between different partners on an equal level. We are not developing our partners. Our partners develop themselves and we support the process, although it is not our development. Our contribution is an external one; we do not create the development. Trust and confidence play an important role, allowing for the transfer of knowledge that corresponds to local needs. Knowledge for development is based on the concept of empowerment. International cooperation should strengthen the capacities of partners to create information, to transfer their knowledge, to adapt external knowledge to local needs, in short, to be responsible for themselves.

Training is therefore a key issue in knowledge transfer and management, and that is why we finance or contribute to quite a number of institutions, for example the institution here in Malta. The contribution is external, aiming to assist and support our partners in offering training. We no longer do the training on our own, through our institutions or even Swiss institutions, but prefer to do it regionally and locally. This is part of our general goal to invest in local resources development. For example, over the last ten years we have reduced the number of Swiss experts in our cooperation programs from 370 to 61. We now are involving more locals or nationals from each country where we have coordination offices.

Knowledge transfer is, of course, not the only answer to poverty alleviation. Access to other resources, in order to implement the acquired knowledge, remains of utmost importance. Furthermore, knowledge transfer and use needs to be adapted to needs of specific groups. There is no magical recipe.

I would like to provide a few considerations about the focus for development agencies such as ours. We want to avoid discrimination in the access and the transfer of knowledge, ensuring that our partners are involved in the discussion regarding knowledge transfer and the use of new information technologies. We would like to avoid gaps widening between various groups: for example, rich and poor, men and women. We want to ensure that the needs of our partners rather than our wishes are forwarded and taken into account in the international arena. We would like, through training, to ensure that our partners can participate in the creation of international knowledge and information and that they can adapt information to local needs and resources. We would like to provide our partners with the knowledge to use technologies and to ensure them access to international networks, use of the Internet, tele-medicine, etc. We would also like to create an enabling environment in these countries to allow them to decide what is in their best interests. And I think we especially have to put emphasis on strengthening institutions, be it in academia, on vocational training levels or in government, in order to implement various issues related to good governance, for example, to fight or combat corruption.

We focus on a number of other areas. We have also to consider that we cannot do our work without taking the interest of our country into consideration. However, safeguard of national interests cannot easily be linked with development cooperation when you really mean development cooperation in the sense I just explained. You must safeguard national interests on another level, bilaterally. But in development cooperation we are involved in the internal politics of a country and that should not be linked to the safeguard of national interests. This is why we operate without a hidden political agenda—this is a prerequisite of trust and mutual understanding. We also have to take into consideration that the ethics of development cooperation have changed and it is not just a question of charity but a question of mutual interests.


Development policy-making takes place in international forums. And that’s where the role of multilateral diplomacy in our range of activities is very important. The global dimensions of problems call for global solutions. Development policies have to be discussed on a multilateral level. Only in this way can globally relevant codes and standards be established. Furthermore, national policies need to reflect international policies. So far, especially in industrialised countries, the reflection of international policies on internal politics is rather low, due to a perception that these international policies refer specifically to developing countries. Sustainable development in an issue for all of the countries in the world, industrialised and non-industrialised. We also believe that each nation must give away part of its sovereignty in the shift to global solutions and global governance. However, cultural diversity should not become a victim of economic globalisation. Finally, mass media is gaining an increased importance in international agenda setting.

I think the Carlson Report on Global Governance of 1994 came out perhaps a few years too early, and that so far traditional diplomacy has not taken its findings enough into consideration. This is not a criticism, but I think traditional diplomacy could learn much from development cooperation. I know that many diplomats have a kind of psychological hindrance about the methods of international cooperation, and this is unfortunate because these skills could prove valuable in many situations. Often the diplomats sent to deal with a situation do not take into consideration intercultural exchanges or the real experiences and the knowledge you can get on the ground while working in another country.

The role of bilateral diplomacy is shrinking but it is concentrated on the safeguard of national interests. Bilateral diplomacy can be used especially for building up alliances in order to work out better solutions to common concerns before entering the multilateral forums.

As you are all aware, the working environment of the diplomat is changing, primarily through the use of technology. Dimensions of information are changing: the collecting and sending of information will become less necessary, while the ability to identify items of real interest in the mass of information available becomes vital. A related issue is how to prepare young diplomats to deal with this rich mass of information, to make use of the information that really serves their needs.

The mechanisms of consultation are also changing, due in part to the informal nature of e-mail exchanges at the working level, which can take place regardless of distance. Two years ago I proposed that Switzerland should open a “virtual embassy”. I explained that as 500 million people around the world have access to the Internet, why not open a website allowing visitors to ask questions, for example about economics, or to apply for visas. Why should it still be necessary for a man in Tajikistan to go to Moscow to apply for a visa to enter Switzerland? Why can’t he get the visa through the Internet and collect it at the airport in Zurich or Geneva? But the virtual embassy has still not been opened—I am still trying. I suggested giving the project to young diplomats, as they would respond immediately. The project would require four or five people engaged 24 hours a day, interactively answering questions for the world public.

Another project I proposed, which has not yet been carried out, relates to image promotion. I suggested that we look into several important data banks in the US and in other countries, to see what information they contain about Switzerland. There was practically nothing, just some historical information. This problem should be addressed.

We are, of course, aware that for knowledge use in development cooperation you need a set of guidelines to make your approach understood. And that is my last message: approaches are a part of knowledge and are very important—they can become as important sometimes as information. And in that respect, when you work with a lot of partners you have to be aware that you need a basic set of rules and principles to follow in your work. We developed these for our organisation, and we are still working on it. We even have a set of seven simple management principles for everybody in our organisation, to ensure they know the basics of the philosophy we follow. I conclude with these remarks knowing that I could not fulfil all your expectations, but I hope I have given you some food for thought for your further undertakings in this seminar.

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