Tools, IP, and Process Knowledge

From 2019 Letter by Dan Wang.

My essay How Technology Grows argues that technological capabilities ought to be represented in the form of an experienced workforce. We should distinguish technology in three forms: tools, direct instructions (like blueprints and IP), and process knowledge. The third is most important: “Process knowledge is hard to write down as an instruction: you can give someone a well-equipped kitchen and an extraordinarily detailed recipe, but absent cooking experience, it’s hard to make a great dish.”

[snip]

Today, Chinese workers produce most of the world’s goods, which means that they engage more than anyone else in the technological learning process. Few Chinese firms are world-leading brands. But workers in China are using the latest tools to manufacture many of the most sophisticated products in the world. They’re capturing the marginal process knowledge, and my hypothesis is that puts them in a better place than anyone else to develop the next technological advancements. To be more concrete, Chinese workers will be able to replicate the mostly-foreign capital equipment they currently use, make more of their own IP, and build globally-competitive final products.

Tools, IP, and Process Knowledge. I like the framing.

What is the root problem to a corporate problem? Tools (resources to solve the problem)? IP (knowing how to solve the problem)? Process Knowledge (knowing what the problem is)? Depends on the context but usually insiders identify Tools and IP more often than Process Knowledge but my experience is that knowing the nature of the problem is more often the root cause.