There are many mis-perceptions of what the Knowledge Economy is despite the phrase tends to be used interchangeably through all walks of life that refer to economics or productivity.
Two phrases, Knowledge Economy and Knowledge Based Economy are a key to the confusion that arises around the new forms of economic productivity. The difference is that in a knowledge economy, knowledge is a product whereas in a knowledge-based economy, knowledge is a tool. Even todate, this difference is not well distinguished in the subject matter literature. They both are strongly interdisciplinary, involving economists, computer scientists, software engineers, mathematicians, chemists, physicists, as well as cognitivists, psychologists and sociologists.
When industry leaders use these terms without understanding their emphasis and how they evolve the economic environments of productivity, they tend to lead the whole economic system towards confusion. The basic contributor to this lacking is the deficit of experts in the region that would have originally been tasked to suggest and layout the knowledge policy frameworks. There are significant initiatives in our neighboring countries where knowledge commissions were created to carryout this prime task of defining the knowledge economy within their country’s context and resources.
Just to make things simple, in order to evolve a Knowledge Economy, the prerequisites are that all the rules including practices that were determinants of success in the previous industrial economy have to be rewritten in an interconnected, globalized economy where knowledge resources such as know-how and expertise are as critical as other economic resources. Rewriting these rules has to take place significantly at the levels of firms and industries in terms of knowledge management as well as at the level of public policy in the form of knowledge policy or knowledge-related policy.
Evolving the Knowledge Economy:
I will use multiple sources including the Wikipedia to define the knowledge economy so atleast our readers understand where they are confused by the industry. The Knowledge Economy evolves with the rise in knowledge intensity of economic activities, and the increasing globalisation of economic affairs. The rise in knowledge intensity is being driven by the combined forces of the IT revolution and the increasing pace of technological change. Globalisation is being driven by national and international deregulation, and by the IT related communications revolution. The evolution is driven by the forces of change in the rules of business and national competitiveness.
By globalization we refer to markets and products being global. By knowledge intensity, efficient production relies on information and know-how; over 70 per cent of workers- in developed economies are information workers; many factory workers use their heads more than their hands. Then, new media comes into play that increases the production and distribution of knowledge which in turn, results in collective intelligence. Existing knowledge becomes much easier to access as a result of networked databases which promote online interaction between users and producers. Computer networking and Connectivity developments such as the Internet bring the “global village” ever nearer. As a result, goods and services can be developed, bought, sold, and in many cases even delivered over electronic networks. As regards the applications of any new technology, this depends on how it meets economic demand. It can remain dormant or make a commercial breakthrough.
continued… in upcoming part-3