It's a commonsense view, and increasingly accepted in academia: knowledge is "situated". Roughly translated, this means you know by doing. And therefore much knowledge is specific to place, time, role, technologies used and so on. Any useful abstraction comes from "experience-up". You do, you experience, you adapt, and then try to derive holistic rules (if that is what you seek).
Once you buy into this understanding it changes the way you value such things as job or life experience. If you've trained to be a sales person of cheap flights, say, we might naively imagine this experience would be useful to selling many other kinds of product or service. But we find that employers put a premium on recruiting staff with experience matching as closely as possible to that proffered by the vacancy. If a vacancy is for marketing fromage frais, then experience with fromage frais is much sought-after.
With this logic, we might also value academics having deep practical experience of the things they abstract. For example, we'd want strategic management academics to have worked in practical organizational strategy for many years. But you'll find that most of them haven't. A rare exception to this pattern of impracticality is medical school. There you can expect medical students to have professors who, literally, roll-up their sleeves and get stuck-in. Medical Schools' commitment to effective practice is very strong, and to theorizing it's relaxed-to-moribund.
So what are, say, business school academics actually doing? Where is the value? Assuming there is indeed value, then perhaps the answer is in a kind of abstraction. While academics neither practice nor innovate much, they tend to be good at validating knowledge i.e. testing, reviewing, critiquing, augmenting, ordering and generally seeing connections, strengths and weaknesses in ideas that most of us wouldn't. Passing on these thoughts via research papers or to students in lectures does, at least, offer the benefit of any reasonable theorizing or abstraction; it allows the reader or listener to step out of their immediate, immersive experience and see things anew.
To really know London, you have to have lived in London. But the last thing a goldfish discovers is water. To really know London, you also have to leave London. Walk around the green belt, visit nearby villages, Manchester, Paris or New York. All those withdrawals from the immersive force of London will offer new perspectives on your London experience. And given we all carry "theories" in our heads anyway, about what makes somewhere or someone strong, good, bad, interesting, etc., you may as well review what's within and see how fair it is. So real understanding - and perhaps wisdom - comes from this blending of deep involvement and withdrawal; both from experience, practice, immersion, and from detachment, reflection, clarity and theorizing. It's this second bit that academics do so well; for all their impracticality, low-innovation and over-theorizing, they do, at least, offer you a more detached and hence clearer perspective. That's useful.