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This article presents an advanced method for managing knowledge using a modular design approach and applied the approach through an example with computer manufacturing. The benefits of modularity are discussed both within and between companies. We find that through modular design, knowledge management systems are simplified and communication between modules is greatly improved. In addition, modularity makes parallel innovation possible, as well as, sharing innovative resources through collaboration. Modularity leads to effective knowledge sharing and thus stimulates knowledge-based innovation. A case study of the computer industry further demonstrates the effects of modularity in an industry. Finally, we suggest that enterprises should take advantage of modularity when they carry out knowledge-based innovation and the measures are developed to implement successful modularity.

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