The paper analyses some of the critical business challenges related to knowledge management in research and development centres within the information and communication technology (ICT) industry. In today's highly competitive world, knowledge has become the dominant source of competitive advantage. The paper stresses the importance of knowledge management for a long-term sustainable business success of an organization and presents key aspects of securing global competitiveness by implementing knowledge management in the software development research and development centres within the ICT industry. Furthermore, it elaborates on the critical importance of knowledge sharing culture. The main challenges and characteristics of knowledge transfer are presented and analyzed. The key principles of corresponding knowledge transfer projects are proposed and discussed. The author proposes a formal model for management of knowledge transfer within organization and between organizations. By having a formal model it would be possible to predict with more accuracy the outcome of the knowledge transfer, to systematically measure and steer the transfer and to focus on the identified key organizational knowledge variables that influence efficiency and effectiveness of such knowledge transfer the most. The analysis is performed on the examples of ICT research and development centres in Croatia and Ireland.
