The United States is shifting to an information economy. Productive capability is no longer completely dependent on capital and equipment; information and knowledge assets are increasingly important. The result is a new challenge to the practice of local economic development. In this information economy, success comes from harnessing the information and knowledge assets of a community and from helping local businesses succeed in the new environment. Knowledge Management (KM) can provide the tools to help economic development practitioners accomplish that task. KM is a set of techniques and tools to uncover and utilize information and knowledge assets -- especially tacit knowledge. Economic development organizations can use KM tools to enhance external communications of local companies including marketing and to promote internal communications within local businesses and help companies capture tacit knowledge. More importantly, they can use those tools to uncover and develop local intellectual assets, including helping develop information products, and helping identify entrepreneurial and business opportunities. KM tools are also useful in developing local economic clusters. Finally, these tools can be used to enhance external knowledge sharing among the economic development community and to capture and share tacit knowledge within an economic development organization.