Innovation and Knowledge Management for Human Resource Development

Innovation and Knowledge Management for Human Resource Development

Erna Rustiana^*1, Kismartini², Agustin Rina Herawati³, Luluk Fauziah⁴, Eley Suzana Kasim⁵, Mulyaningsih⁶

^1,2,3,4Department of Public Administration, Faculty of Social and Political Sciences, Diponegoro University, Semarang, Indonesia

⁵Accounting Research Institute, Universiti Teknologi MARA, Malaysia

⁶Department of Public Administration, Faculty of Social and Political Sciences, Garut University, Indonesia

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.908000311

Received: 08 August 2025; Accepted: 14 August 2025; Published: 09 September 2025

ABSTRACT

This study conceptualise the relationship between innovation, knowledge management, and the development of excellent human resources (HR) in the context of modern organizations. Various library sources such as relevant books and scientific articles, were referred. Concepts and literature were selected based on inclusion criteria including topic relevance, novelty, and publication in indexed journals. Data analysis was carried out through thematic methods to synthesize the main concepts which were then classified into three main themes: the role of innovation as a value creation strategy, knowledge management as the foundation of innovation, and strengthening human resources as the main capital of organizational sustainability. The results of this study produce a conceptual framework that emphasizes that the integration of innovation, knowledge management, and the development of excellent human resources is an important strategy in strengthening organizational competitiveness in the era of global competition.

Keywords: organizational innovation, knowledge management, excellent human resource development, literature review, organizational competitiveness

INTRODUCTION

The development of the digital era has brought fundamental changes in human resource (HR) management. The application of technology such as artificial intelligence (AI), Internet of Things (IoT), big data, and blockchain no longer just an administrative tool, but has become the main driver of innovation and efficiency in human resource management (Chang et al., 2024). This transformation is changing the way organizations operate while forcing HR management to adopt a new, more adaptive mindset.

In the context of this rapid change, the role of HR management is crucial to ensure that organizations are able to survive and compete. HR is no longer only in charge of managing administration such as payroll and recruitment, but is also responsible for skill development, change management, and the formation of an organizational culture that supports innovation and flexibility. HR management must focus on continuous learning, given that technological changes demand new skills that are relevant to the times (Sedarmayanti et al., 2020).

The urgency of this research lies in the need for organizations to reformulate HR management strategies in the face of a dynamic and uncertain digital era. Rapid technological changes require organizational readiness to build human resources that are not only adaptive, but also proactive in managing knowledge and skills. Without a responsive HR management strategy that is integrated with knowledge management, organizations will find it difficult to maintain competitiveness, and even threaten to stagnate amid fierce global competition. Therefore, this research is important to explore and develop relevant HR management models in the digital era, as well as provide strategic recommendations for organizations to remain competitive and sustainable.

Organizations that want to survive in global competition must build a conducive learning environment. This environment will encourage employees to continue learning, develop individual knowledge, and share that knowledge so that it becomes the collective strength of the organization. In an era of knowledge-based economy full of uncertainty, the ability to create and manage knowledge is a competitive advantage that cannot be ignored.

Knowledge management is one of the main strategies to maintain the sustainability and growth of the organization. Knowledge management is not just the collection of information, but includes the process of acquisition, communication, and exploitation of knowledge that is able to give birth to innovation. Learning in an organization must involve all levels, from individuals to groups and between organizations, for the innovation process to run optimally (Sedarmayanti et al., 2020).

Furthermore, organizations must be able to create a systematic system in finding, selecting, and organizing information so that it can be used optimally by employees. A conducive work environment and work mechanisms that encourage knowledge exploration are key to strengthening knowledge mastery in certain fields and making them organizational knowledge.

Individual competencies are the foundation for the development of excellent human resources. According to Sedarmayanti, Listiani, and Mulyaningsih, this competence is formed from motives, disposition, self-concept, knowledge, and skills. All of these elements contribute to creating individuals who are not only productive but also adaptive to technological changes and organizational dynamics.

Knowledge transformation in an organization also requires a clear strategy. Organizations must be able to identify relevant knowledge needs, form knowledge teams with diverse backgrounds, and create a work culture that supports knowledge management. Technology is only a tool if it is not accompanied by the right work processes and culture.

LITERATURE REVIEW

Successful knowledge management allows organizations to access strategic information through a variety of systems such as data warehousing, data mining, and decision support systems. It also enables global collaboration through the internet and other collaborative platforms, allowing organizations to improve speed, agility, and precision in decision-making.

Research Syahreza et al., (2023) shows that the existence of human resources greatly determines the success of the organization. The skills, knowledge, and dedication possessed by human resources will determine the achievement of strategic targets and objectives. Effective talent management is the main indicator for organizations in building competitiveness (Rachmawati et al., 2023). Organizations that are able to attract and retain excellent talent will have an advantage in creating innovation and efficiency (Suparman & Soantahon, 2022).

The importance of human resources who are responsive to the development of information technology. Adaptive human resources are a differentiating factor that determines the organization’s position in global competition. Therefore, organizations need to develop HR strategies that are responsive to changes and able to face the challenges of globalization by strengthening the quality of human resources.

To win the competition in the future, organizations not only need to compete directly with competitors, but also create new market spaces that have not been worked on through the implementation of the blue ocean strategy. This strategy emphasizes value innovation with a combination of low costs and increased benefits for consumers as an approach to creating an unparalleled market (Mebert & Lowe, 2017). The key to success in this strategy lies in the organization’s ability to manage knowledge and understand market needs even before the product is marketed.

Today’s competitive advantage increasingly depends on the ability of organizations to generate continuous innovation, whether in the form of products, services, or business processes. Innovation has a strategic role in creating added value that strengthens the competitiveness of organizations in the global market. In addition, new technologies and innovations are important bridges for organizations to answer the needs of society and create sustainable differentiation.

In building a excellent organization, the knowledge inherent in human resources becomes a very valuable intangible asset. The learning process and knowledge management are an important foundation for the creation of innovation in the organizational environment. According to several studies, there are several main activities that need to be implemented in innovation management, such as strengthening the innovation process across departments, integrating technology to improve customer satisfaction, strategic planning of technology to maintain a balance of competency portfolios, organizational adjustment to changes that trigger the need for new knowledge, and business development that uses innovation as a tool to improve organizational performance (Tidd & Bessant, 2018).

Some of the challenges that organizations still face include strengthening managerial competence and mastery of technology, managing workforce diversity to increase participation in organizational processes, and improving expertise and skills to prepare for promotion and organizational problem solving (Buchelt et al., 2020). In addition, facing globalization requires an integrated strategy with qualified human resources (Kuzmenko et al., 2023).

Thus, human resource management in the digital era can no longer be done with a conventional approach. A comprehensive strategy is needed, based on competency development, knowledge management, innovation, and organizational learning in order to be able to create a sustainable competitive advantage (Kaupa, 2023; Striteska & Prokop, 2020).

RESEARCH METHODOLOGY

This article uses a qualitative approach with the literature review method (library research). Data was collected through literature studies from books as well as scientific articles relevant to the research. The analysis was carried out thematically to synthesize the main concepts related to the development of excellent human resources. The process of implementing the study is carried out through several stages, namely:

1. Identification of literature using keywords such as organizational innovation, knowledge management, and excellent human resources in databases such as Google Scholar, Garuda, and SINTA;
2. Selection of sources with inclusion criteria: articles written by academics or practitioners, published in peer-reviewed journals, relevant to the topic’s focus, and presenting concepts, models, or findings that support the analysis;
3. Evaluation of the content of the literature to assess its validity, up-to-dateness, and scientific contribution; and
4. Thematic synthesis of the concepts found, which are then grouped into three main themes: the role of innovation, knowledge management strategies, and the development of excellent human resources.

The results of the literature synthesis are used to build a conceptual framework of thought that explains the relationship between innovation, knowledge management, and HR quality in the context of modern organizations.

RESULTS AND DISCUSSION

This discussion elaborates the findings of the literature review with a thematic analysis approach. Five main themes were identified as strategic foundations in building excellent human resources (HR) based on innovation and knowledge management.

Innovation as a Form of Knowledge Management

In the face of future competition, successful organizations are not those who are caught up in direct competition with competitors, but those who are able to create blue ocean strategy through the discovery of new market spaces that have not been cultivated. Concept value innovation, which combines cost efficiency with increased benefits for consumers, is a key reference in building sustainable competitiveness (Mebert & Lowe, 2017). Application blue ocean strategy is closely related to knowledge management (knowledge management), where organizations are required to understand the needs of the market even before the product is launched.

The key to winning today’s competition lies in the organization’s ability to generate creative ideas as the foundation for product and service development. Competitive advantage is determined not only by the ability to create products, but also by the success of the organization in implementing continuous innovation and providing added value for customers (Porter, 1998; Tidd & Bessant, 2018). Innovation and technology adoption are important instruments in creating new value for consumers and strengthening the competitive position of organizations.

Organizations that want to excel in competition must realize that intangible assets in the form of knowledge inherent in human resources have a crucial role. Knowledge developed through the learning process must be managed effectively through knowledge management, because this is the foundation for the creation of innovation in the organization. Through good knowledge management, organizations are able to produce innovative products and services that suit consumer needs and preferences (Nonaka & Takeuchi, 1996; Wang & Wang, 2012).

In the context of innovation management, some researchers suggest several strategic activities that must be implemented by organizations, namely:

1. Innovation process, which emphasizes the importance of cross-functional collaboration between departments in strengthening the organization’s business processes (Tidd & Bessant, 2018).
2. Technology integration, which is the combination of technological innovation with company products to increase customer satisfaction (Zahra & Covin, 1994).
3. Technology strategic planning, focusing on careful planning in the development of technology-based projects to maintain a balance between the technology portfolio and the competencies possessed (Phaal, 2004).
4. Organizational change, where innovation often triggers transformation in the organization which then increases the need for new knowledge (Edmonds, 2011).
5. Business development, namely the use of innovation as a tool to improve and create more adaptive and competitive organizational conditions (Chesbrough, 2003).

Thus, innovation management that is integrated with knowledge management and learning is a vital strategy for organizations to create a sustainable competitive advantage in the midst of global competition dynamics.

Knowledge Management Strategy in Organizations

Strategy is a series of integrated and comprehensive plans designed to connect the internal strengths of an organization or company with the external environmental conditions faced, so as to ensure the achievement of the goals that have been set (Agu et al., 2016; Freeman, 2015). In the context of knowledge management, there is knowledge that is Tacit, i.e. knowledge stored in individual experience and intuition so that it is difficult to be expressed in formal or documented form (Nonaka & Takeuchi, 1996).

To redirect tacit knowledge To the other party, intense personal interaction is needed, both through mentoring, discussions, and continuous collaboration. This kind of knowledge transfer is important in strengthening the organization’s ability to deal with the dynamics of the business environment (Grant, 1996; Polanyi, 2009). The survival and success of a company is largely determined by its capacity to respond to change and manage the strength of various sources that influence both inside and outside the organization (Barney, 1991; Teece et al., 1997).

Dimensions of Innovation in Organizations

The application of innovation in an organization includes several crucial dimensions that are interrelated. First, the innovation process that prioritizes cross-functional collaboration in various organizational units in an integrated manner. Second, technology integration, which is the alignment between the technology developed and the products produced to increase customer satisfaction. Third, technology strategic planning, which focuses on managing the technology portfolio in a balanced manner to maintain organizational competitiveness. Fourth, organizational change, where innovation is the main driver in adapting to changes and updating the knowledge base owned. Fifth, business development, which positions innovation as a strategic instrument to create and improve value in the organization (Crossan & Apaydin, 2010; Tidd & Bessant, 2018).

These five dimensions form a dynamic cycle that strengthens the organization’s ability to create new ideas, products, or processes that have economic and strategic value. Innovation as part of process management requires a structured system and a supportive organizational culture, so that organizational effectiveness can be achieved optimally (Dodgson et al., 2006).

The success of innovation in organizations is highly dependent on the use of intangible assets, especially those contained in human resources. A company’s intellectual assets include the ability to innovate, adaptability to change, sensitivity to market opportunities, and employee talent development and retention (Subramaniam & Youndt, 2005). In this case, an important dimension that strengthens innovation comes from aspects of the organizational system, such as the technology used, flexible organizational structure, adaptive work processes, innovative culture, employee commitment, and the organization’s ability to access and retain talented employees (Barney, 1991; Jansen et al., 2006).

Development of Excellent Human Resources as Innovation Capital

The development of a nation urgently requires human resources (HR) who are of excellent quality, intelligence, and integrity, and have a strong national spirit. Such human resources are required not only to be able to fulfill personal and family responsibilities, but also to contribute to the community, society, and as good citizens. Excellent human resources are needed to face the complexity of life’s challenges while still upholding ethics in various dimensions, both personal and social. Therefore, investment in human resource development or human capital become a strategic priority for the nation that wants to achieve progress and prosperity (Kaiper, 2017).

HR management plays an important role in increasing the capacity of individuals, organizations, and systems to carry out functions and achieve predetermined goals. Human capital represents the combination of intelligence, skills, and expertise that are the main characters of an organization. As the organization’s main asset, human capital It needs to be continuously developed through sustainable investment so that the organization is able to survive and grow in the midst of competition (Armstrong & Taylor, 2023). The HR management function aims to ensure the availability of a competent, dedicated, and motivated workforce, by identifying the future needs of the organization and providing opportunities for continuous learning and development (Ulrich et al., 2010).

In an effort to improve the quality of human resources, a directed investment policy is needed to build human capacity, both in terms of development quality and community welfare. The effectiveness of human resource development is greatly influenced by the management system implemented and the strength of the vision of the organization’s leaders. Human quality must be reviewed from three main aspects: (1) spiritual qualities that include faith, piety, and morals; (2) the quality of community and national life which includes social solidarity, responsibility, and discipline; and (3) the quality of competence, which includes intelligence, knowledge, skills, and independence, taking into account factors of the work environment, leadership, and understanding of social and economic values.

To build excellent human resources, individuals who are competent, have integrity, have high motivation, and are able to create productive working relationships and strong team collaboration are needed. On the other hand, the era of globalization demands higher productivity because competition now takes place in an infinite space, which is full of fierce, fast, and complex competition. This can only be overcome with the right strategy through strengthening quality human resources that are able to increase organizational efficiency, effectiveness, and productivity (Porter, 1998). Strengthening policies and regulations that regulate human resources is also the key to improving the quality of society, because excellent human resources are able to solve various problems and maintain a balance in fulfilling their living needs (Stromquist, 2019).

Organizations will achieve their best performance if they are supported by quality human resources who are visionary, and adaptive to change. Building human capital It must be done through consistent investment, with an ever-updated planning strategy and execution by competent individuals and highly committed to mutual progress (OECD, 2024). Building human resources means directing individuals to become dignified and excellent human beings. The education process is the main means in shaping the character and integrity of human resources, as well as fostering creativity and innovation as part of a productive work culture (Nonaka & Takeuchi, 1996).

Creative individuals usually have a character that is open to change, relies on critical thinking, discipline, likes challenges, and makes the learning process a part of their life. They are also quality-oriented with standards that suit market needs, have uniqueness and distinguishing advantages so that they are able to compete globally (Das, 2016). In addition, it is important for humans to understand themselves, get to know the surrounding environment, and use it ethically to support life. Through a structured learning and interaction process, a person will grow into an adult person who has broad insights, intelligence, and culture (Mon, 2017).

Human resources with excellent character are reflected in their skills, skills, ethics, and intrinsic drive to excel and build a positive reputation. Achievements and reputation are key factors in improving a person’s quality of life, well-being, and socioeconomic status, which ultimately contributes to the progress of the civilization of individuals, families, societies, and nations.

According to Stoyanov (2017), the motivation to excel is the main driver for individuals to achieve success and compete in certain standards of excellence. Characteristics of individuals who have the motivation to excel include: liking challenges with a medium level of difficulty; open to feedback to measure its performance; diligent, persistent, and active in the pursuit of achievements; responsible for his duties and the results of his work; favoring challenging tasks with measurable risks; always looking for ways to improve themselves; and rich in ideas and able to realize them in real action (Khan et al., 2020; Stoyanov, 2017).

Determining Factors for the Success of Innovation Strategy

In formulating an organizational innovation strategy, there are a number of important aspects that must be the main concern so that innovation runs effectively and provides optimal results.

Managerial Competence

The success of innovation is highly determined by managerial ability to design and implement each stage of innovation, from research, development, engineering, to analysis of environmental conditions. Without systematic planning, the innovation process risks not achieving the desired goals (Tidd & Bessant, 2018).

Employee Leadership Commitment and Participation

The implementation of an innovation strategy requires leadership that is communicative, highly committed, and dedicated to driving change in the organization. Leaders must be able to create a climate of information openness, so that employees are actively involved in the innovation process and have a sense of ownership of these changes. Effective leadership is able to facilitate the internalization of the culture of innovation within the organization (Agu et al., 2016).

Human Resources (HR) Competence

HR is the main implementer of the innovation strategy, so it is important to have a strong, competent, and adaptive workforce to change. Strengthening human resource competencies will increase organizational capacity in managing the innovation process in a sustainable manner (Barney, 1991).

Research and Development (R&D) Facilities

The availability of R&D facilities allows organizations to continue to conduct studies and experiments in order to create innovations that are adaptive to market needs. Strong R&D helps organizations create a competitive advantage that competitors find difficult to replicate (Chesbrough, 2003).

Networks and Information Systems

The development of an effective information system is essential to support quality service, speed up response times, and offer competitive prices. A good information system allows organizations to monitor market developments both locally and globally so that innovation decisions can be more targeted (Karsim, 2023).

Innovation Precision

The success of innovation is also determined by the precision in creating ideas and ideas that are in accordance with rapidly evolving changes and trends. External factors such as economic, social, cultural, and regulatory conditions greatly influence the opportunities and risks of each innovation developed (Dodgson et al., 2006; Teece et al., 1997).

By paying attention to these six aspects, organizations can design a more comprehensive and sustainable innovation strategy to achieve a competitive advantage in the midst of the dynamics of global change.

To understand the relationship between innovation, knowledge management, and human resource development in organizations, here is a summary of the main themes along with their focus and brief explanation:

Table 1. Summary of Key Themes and Focuses in Innovation Implementation and HR Management

Source: Researcher’s results, 2025

CONCLUSION

Strengthening innovation in organizations cannot be separated from the role of knowledge management, human resource development (HR), and planned innovation management strategies. Innovation functions as a tangible manifestation of knowledge management that is able to create added value and competitive advantage through strategies such as the blue ocean strategy and the proactive use of market information.

The success of innovation in an organization depends on several key factors, such as managerial competence, leadership commitment, HR competence, support of R&D facilities, adaptive information systems, and the accuracy of innovation in responding to external changes. Knowledge management that includes tacit and explicit knowledge, supported by cross-functional and organizational collaboration, is the foundation in creating innovations that are relevant to market and societal needs.

In addition, the development of excellent human resources is a strategic investment through education, character building, and increased motivation for achievement as stated by McClelland. Human resources who are creative, innovative, ethical, and highly competitive are the main pillars in facing increasingly tight global complexity and competition.

Thus, the integration of innovation, knowledge management, and sustainable human capital development is an important strategy to improve the quality of the organization, the welfare of the community, while strengthening the quality of the nation’s civilization in the era of dynamic globalization.

ACKNOWLEDGEMENT

The authors thank the Faculty of Social and Political Sciences, Diponegoro University, Semarang, Indonesia and also acknowledge the assistance by the Accounting Research Institute of Universiti Teknologi MARA, Malaysia and the Ministry of Higher Education.

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