I've thought of one more application for KM in a downturn.
One of the most distressing and risky activities in a downturn is downsizing (ie making people redundant). Distressing for obvious reasons, risky because it distracts employees from the safe and effective operation of their work, can cause negative publicity both locally and nationally, and can leave the remaining staff disenfranchised and insecure.
Maybe that's why the Knowledge Asset we built in 1998 in BP on effective downsizing was considered so valuable. We looked at historical downsizing exercises, we drew out lessons learned and good practices, and we documented the secrets of downsizing quickly, effectively, fairly and openly; to minimise disruption, anxiety and insecurity. This knowledge was then applied in several downturns in South America, and proved very useful indeed.
So, reason number 5 for KM in a downturn; learning about downsizing. You may well have to lose staff from your company, so use KM to learn how to do this fast and fairly, leaving the remaining workforce energised about the future rather than traumatised and insecure.