Knowledge Economy

The knowledge economy is a term that refers either to an economy of knowledge focused on the production and management of knowledge in the frame of economic constraints, or to a knowledge-based economy. In the second meaning, more frequently used, it refers to the use of knowledge technologies (such as knowledge engineering and knowledge management) to produce economic benefits as well as job creation. The phrase was popularized if not invented by Peter Drucker as the title of Chapter 12 in his book The Age of Discontinuity.

Knowledge Economy Index for Africa. As a region, Africa is at the bottom with South Asia.

1 1 Mauritius 2 -1 South Africa 3 2 Namibia 4 -1 Botswana 5 3 Cape Verde 6 -2 Swaziland 7 2 Kenya 8 3 Senegal 9 5 Ghana 10 11 Mauritania 11 1 Uganda 12 -5 Zimbabwe 13 10 Madagascar 14 3 Tanzania 15 -9 Zambia 16 0 Mali 17 -7 Lesotho 18 1 Benin 19 11 Angola 20 2 Nigeria 21 7 Sudan 22 -2 Burkina Faso 23 1 Cameroon 24 -11 Malawi 25 -7 Cote d’Ivoire 26 -1 Mozambique 27 4 Ethiopia 28 -13 Eritrea 29 0 Rwanda 30 -4 Guinea 31 -4 Sierra Leone

The essential difference is that in a knowledge economy, knowledge is a product, in knowledge-based economy, knowledge is a tool. This difference is not yet 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.

Various observers describe today’s global economy as one in transition to a “knowledge economy”, as an extension of an “information society”. The transition requires that the rules and practices that determined success in the industrial economy need rewriting in an interconnected, globalized economy where knowledge resources such as know-how and expertise are as critical as other economic resources. According to analysts of the “knowledge economy”, these rules need to be rewritten at the levels of firms and industries in terms of knowledge management and at the level of public policy as knowledge policy or knowledge-related policy.

A key concept of the knowledge economy is that knowledge and education (often referred to as “human capital”) can be treated as one of the following two:

• A business product, as educational and innovative intellectual products and services can be exported for a high value return.
• A productive asset

It can be defined as

” The concept that supports creation of knowledge by organizational employees and helps and encourages them to transfer and better utilize their knowledge that is in line with company/organization goals “

Commentators suggest there are various interlocking driving forces, which are changing the rules of business and national competitiveness:

• Globalization — markets and products are more global.
• Information technology, which is related to next three:
  • Information/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.
  • New Media – New media 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 data-bases 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.

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