I was watching a recent political commentary about the appointment of a new minister of government to replace the more prominent official who is now just an backbencher in the upper house. It was mentioned by the pros that the new minister is actually very knowledgeable on foreign policies. The cons replied that knowledge does not mean that the new minister has the experience in foreign policies.
Knowledge is not experience is also applicable to the Engineering profession. New graduate engineers are very knowledgeable on the theoretical background of their chosen profession. However, if situation changes from ideal to actual, these new graduate engineers could not relate anymore than a well experience engineer.
These two terms are actually inter-related to each other. An experience without knowledge is worst than having the knowledge without experience. The former could be very dangerous, the later will be more tamed. It will not take long anyway that the knowledgeable engineer will gain experience and surpass the experienced without theoretical background.