Relationship among Soft Skills, Hard Skills, and Innovativeness of Knowledge Workers in the Knowledge Economy Era

AbstractFor the last two hundred years, neo-classical economics has recognized only two factors of production: labor and capital. But, nowadays information and knowledge are replacing capital and energy as the primary wealth-creating assets. Technological developments have transformed wealth-creating work from physically-based to knowledge based. Technology, knowledge as well as innovation are now the key factors of production.Knowledge economy is economy based on creating, evaluating, and trading knowledge. In a knowledge economy, labour costs become progressively less important and traditional economic concepts such as scarcity of resources and economies of scale of economy cease to apply. The most valuable asset of the 21st-century institution, either business or non-business, will be its knowledge workers and their productivity. Knowledge workers’ productivity is the biggest of the 21st century management challenges. In the developed countries, it is their first survival requirement. Making knowledge workers productive requires changes in attitude, not only on the part of the individual knowledge worker but also on the part of the whole organization. (Drucker, 1999, in http://www.knowledgeworkerperformance.com).Creating knowledge relates to the education system, which creates knowledge workers and innovation system, for example soft skills (worker behaviour), Positive Psychological Capital (Luthan et al., 2007), and hard skill such as ICT literacy. The innovation system, which contributes to innovativeness, in any country, consists of institutions, rules, and procedures that affect how the system acquires, creates, disseminates, and uses knowledge.The objectives of this research are to develop a conceptual model which describse the relationship among the soft skills of knowledge workers, hard skills of knowledge workers, innovativeness of knowledge workers in the context of knowledge economy in Indonesia as a developing country. Multiple Regression Analysis was used as a method for this research. The conceptual model was designed with independent and dependent variables. The independent variables are hard skills, information seeking hard skills, concept thinking soft skills, and self efficacy - positive psychological capital. The dependent variables are: technical innovativeness (product and services) and non-technical innovativeness (organization and marketing). Only one company as the subject of this research which becomes the limitation of the study. The research findings are that only information seeking soft skill that positively influnced technical innovativeness and only hard skills that positively influenced non-technical innovativeness