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What is the scenario exactly? The knowledge is proprietary and thrown away? And also the worker never wrote or used the innovation elsewhere despite it not living in a patent?

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There is such a thing as institutional knowledge, you build it up by retaining staff properly, training replacements and handing this knowledge down, you need continuity. Another important part of this is doing a thing often. For example, if you halt manufacturing of a widget and then want to restart manufacturing it two decades later, you are going to run into every single snag and problem found during the first iteration of the process, you're starting from scratch and you might not even be able to actually replicate the original process properly.

The effect even applies on a larger national scale, where if a country stops investing in infrastructure projects for a long period, they will find themselves incapable of executing these projects properly in the future.

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