Why managing knowledge dynamics in open innovation matters in the digital transformation era: A case study of distributed manufacturing in fine ceramics

While national R&D projects have traditionally prioritized technological advancement, they often lack integrated strategic knowledge management frameworks to guide them toward intended outcomes. This becomes increasingly critical in the era of digital transformation, where knowledge flows are accelerated, and diverse sources of expertise, both human and machine-based, must be effectively integrated. This study examines a complex, government-funded digital transformation project in South Korea’s fine ceramics sector that failed to achieve its originally intended outcomes, with a focus on how knowledge dynamics were managed. Building on the SECI model and DIKW hierarchy, the paper proposes a strategic knowledge management framework that accounts for both linear knowledge dynamics (associated with data-driven, technological dimensions) and spiral knowledge dynamics (reflecting socio-cultural and strategic dimensions). Based on focus group interviews and project documentation, the findings reveal that insufficient attention to spiral knowledge dynamics, particularly in open innovation environments, undermines project performance due to overemphasis on linear, technology-centric knowledge flows. The study concludes that the success of digital transformation initiatives depends on managing both linear and spiral knowledge flows in a balanced and integrated manner.