"...a strategic goal for the next decade: to become the most dynamic and competitive knowledge based economy in the world". (Lisbon 2000 EU Council Strategy objective). Today's global economy is in a state of transition to a "knowledge economy". In the global economy, the management of knowledge is becoming more critical to growth than the simple allocation of scarce resources such as land, labour and natural resources. With this transition being at the heart of western strategy, what are the challenges that lie ahead?