Theories of the Knowledge Economy
Learning and globalizing economy
Knowledge is one of the most important factors to create economic welfare and development. Our society moves towards a knowledge based economy and during the last decades the speed at which knowledge changes has increased drastically. Although our world has moved closer together geographically, globalisation is not a completed process. In some areas borders cease to exist while in others borders remain crucial. This implies that globalizing might not be advantageous for all social groups. Therefore, it is much more sensible to refer to a globalizing economy rather than a global economy. The learning economy and the globalizing economy are very closely connected as knowledge and learning have become essential key factors in not only economic developments but also in social developments. The fact of who has access to what kind of knowledge determines the chances for successes and future innovations or the lack there of. This results in powerful circle in which the globalisation process thrives on knowledge and learning.
Knowledge itself can be divided in tacit knowledge (typically individual practical skills that cannot be made explicit and cannot be transmitted through (tele)communication networks) and codified knowledge (it can be learned through experience and interaction with other people and can be transfered through various medias).
Waves and divergences
The gap between rich and poor countries has widened during the last decade according to a study done by the OECD comparing growth rates. The divergence between them is mainly due to the social capability of this country to adapt to institutional changes and to exploit the potential of new technologies. History shows that this process follows a pattern starting with a recession, which reveals the need for new technologies, industries and infrastructure. As a consequence the country undergoes a phase of structural adjustment characterized by high unemployment because of the mismatch of old existing skills and the new skills necessary for the new technology. This wave is followed by a period with near full-employment and a higher standard of living as well as a new movement towards social reforms for a more even distribution of benefits and costs. This part of the process is the ideal point to reduce disparities between countries because the slow downswing in leading countries forces investors to look for new countries to invest their money – and they often turn to catch-up countries. In the 1980s the East Asian countries benefited from the rapid growing sector of electronics and telecommunication products and caught up fast to the then leading countries. This was only made possible because of the steadily active policies those countries had implemented which focused on investments in education, training, R&D as well as other scientific and technical activities.
Increasing the capacity to innovate and the need for cooperation
The process of increasing the capacity to innovate takes place on different levels. Firstly, companies themselves should create an internal environment stimulating innovation (competence building, job rotation, interaction, shifting of responsibility). Secondly, companies should cooperate as innovative networks (clusters). Thirdly, the state should look after an even distribution of the costs and benefits which are closely related to innovation in order to reduce disparities, social exclusion and environmental damage – problems which are likely to occur simultaneously with innovation. The different policy areas (education, distribution, labour market, industry, energy and environment) have to cooperate and follow a common strategy.
Sources
Knowledge is one of the most important factors to create economic welfare and development. Our society moves towards a knowledge based economy and during the last decades the speed at which knowledge changes has increased drastically. Although our world has moved closer together geographically, globalisation is not a completed process. In some areas borders cease to exist while in others borders remain crucial. This implies that globalizing might not be advantageous for all social groups. Therefore, it is much more sensible to refer to a globalizing economy rather than a global economy. The learning economy and the globalizing economy are very closely connected as knowledge and learning have become essential key factors in not only economic developments but also in social developments. The fact of who has access to what kind of knowledge determines the chances for successes and future innovations or the lack there of. This results in powerful circle in which the globalisation process thrives on knowledge and learning.
Knowledge itself can be divided in tacit knowledge (typically individual practical skills that cannot be made explicit and cannot be transmitted through (tele)communication networks) and codified knowledge (it can be learned through experience and interaction with other people and can be transfered through various medias).
Waves and divergences
The gap between rich and poor countries has widened during the last decade according to a study done by the OECD comparing growth rates. The divergence between them is mainly due to the social capability of this country to adapt to institutional changes and to exploit the potential of new technologies. History shows that this process follows a pattern starting with a recession, which reveals the need for new technologies, industries and infrastructure. As a consequence the country undergoes a phase of structural adjustment characterized by high unemployment because of the mismatch of old existing skills and the new skills necessary for the new technology. This wave is followed by a period with near full-employment and a higher standard of living as well as a new movement towards social reforms for a more even distribution of benefits and costs. This part of the process is the ideal point to reduce disparities between countries because the slow downswing in leading countries forces investors to look for new countries to invest their money – and they often turn to catch-up countries. In the 1980s the East Asian countries benefited from the rapid growing sector of electronics and telecommunication products and caught up fast to the then leading countries. This was only made possible because of the steadily active policies those countries had implemented which focused on investments in education, training, R&D as well as other scientific and technical activities.
Increasing the capacity to innovate and the need for cooperation
The process of increasing the capacity to innovate takes place on different levels. Firstly, companies themselves should create an internal environment stimulating innovation (competence building, job rotation, interaction, shifting of responsibility). Secondly, companies should cooperate as innovative networks (clusters). Thirdly, the state should look after an even distribution of the costs and benefits which are closely related to innovation in order to reduce disparities, social exclusion and environmental damage – problems which are likely to occur simultaneously with innovation. The different policy areas (education, distribution, labour market, industry, energy and environment) have to cooperate and follow a common strategy.
Sources
- Freeman, Chris (2002): 8. The Learning Economy and International Inequality. In: Daniele Archibugi/Bengt-Ake Lundvall (eds.): The Globalizing Learning Economy. Oxford: Oxford University Press. 147-163
- Lundvall, Bengt-Ake (2002): Innovation Policy in the Globalizing Learning Economy. The Globalizing Learning Economy. Oxford: Oxford University Press. 273-310
- Moulaert, Frank/Sekia, Farid (2003): Territorial Innovation Models: A Critical Survey. In: Regional Studies 37 (3), 289-302
- Lundvall, Bengt-Ake/Archibugi, Daniele (2002): Introduction: Europe and the Learning Economy. The Globalizing Learning Economy. 1-19
Andrea Visotschnig - 20. Mär, 17:03
Questions to discuss
As students, you are involved in an institution that is part of what is called “knowledge economy”. What are your impressions of the activities of your university?
What is knowledge for you? How would you describe knowledge? Do you have the impression that what you are taught at university can be considered “relevant”? What is “relevant” knowledge for you? What do you expect from university concerning the contents of teachings?