Introduction of Knowledge Economics !
Introduction of Knowledge Economics !
Introduction of Knowledge Economics !
Knowledge Econimics
Introduction
On that basis, modern economies are
moving away from the idea of a resource economy and into the stream of
knowledge economy. In the knowledge economy also resources contribute to growth
but they have been relegated to the secondary level.
To a large extent, technologically advanced economies today are truly knowledge-based. According to the Organisation for Economic Co-operation and Development (OECD), more than 50% of the world's GDP is based on knowledge. It is now believed that 70-80 percent of economic growth is due to new and better knowledge.
So, to sum up, the theories and the
practical experience of the whole world tell us that in addition to land,
labour, capital and effort in the development of a country, technology or
knowledge or knowledge economy is an essential element in the development of a
country. Therefore, countries can achieve high growth only by building such a
knowledge society or knowledge economy. Competition can be fierce
in today's world.
Definition of knowledge
economics Although there have been
various definitions of knowledge economics over time, the following definition
is the most recently accepted definition of knowledge economics. ""
"A knowledge economy is an economy that absorbs, generates, disseminates,
and uses knowledge efficiently to further economic development."
Continuous application of knowledge, definitions and creation of knowledge is
central to the process of economic development.
It is on this basis that the
transformation of an economy into a knowledge economy is seen as an essential
requirement. In the knowledge economy, knowledge is emphasized as a factor of
production that drives economic growth. With the advent of the knowledge
economy, the cost of labor becomes progressively less important, and
traditional economic considerations such as grandeur and quantitative austerity
are no longer applied. From time to time - various ideas and perspectives have
been put forward by different materialists regarding the
knowledge economy.
Knowledge economy is the market for
the production and sale of scientific and engineering inventions that can be
commodified in the form of patents or other intellectual property protection.
Producers of information such as
scientific experts and research laboratories are also considered to be part of
knowledge economics.
Due to globalization, the world
economy has become knowledge-based. Bringing best practices from each country's
economy and knowledge-based factors to create an interconnected and global
economy, human expertise and trade secrets are considered important economic
resources. However, it should be noted that generally accepted accounting
principles (GAAP) do not allow companies to include these assets in their
balance sheets.
Knowledge economics and human
capital, knowledge economics education and knowledge refers to how human
capital can act as a productive asset or commodity to be sold and exported to
benefit individuals, businesses and the economy.
This component of the economy relies
heavily on knowledge skills rather than resources or physical contributions.
Various definitions of epistemology
have been published by the OECD from time to time. Following are the published
guidelines:
"Knowledge economies are
economies based on the production, sharing and use of knowledge and
information" (OECD-1996).
Knowledge economy is an economy based
on the creation, evaluation and exchange of knowledge (OECD-1998).
"Knowledge economy is an
economic system in which the creation and use of knowledge plays a central role
in the creation of wealth. The knowledge economy develops when it is used
effectively in all forms of economic activity.
In addition to the above definitions,
the following definitions have been given by various parties in relation to the
knowledge economy:
Charles Leadbeater (1991) in his
report New Measures for New Economies defines knowledge driven economy as not
only the description of high technology industry, but also of new resources
that can be optimally used in all sectors, all companies, all regions, from
agriculture to software and biotechnology.
As defined by ESRC (2005), economic success depends on the efficient use of largely intangible resources such as knowledge, skills and innovation. The term knowledge economy refers to this type of economic system.
According to KOK (2004), "The
intellectual community is a broad concept that indicates increased involvement
in research and development. It covers all aspects of the modern economy.
Knowledge is central to the accumulation of wealth in such an economy. The
economy becomes a knowledge economy when new knowledge is applied to everything
from high-tech manufacturing, information and communications technology, and
knowledge-intensive services, to creativity-based industries such as media
and architecture.
It is noteworthy that although
various definitions have been put forward from time to time in the context of
knowledge economics, a common definition has not been put
forward to date.
The foundations of the knowledge economy
The World Bank defines the
four pillars of the knowledge economy as: long-term investments in education,
development of innovation capabilities, modernization of information infrastructure,
and an economic environment conducive to market mobility. The four pillars of
the knowledge economy as defined by the World Bank are:
• Human capital.
• A system of innovation
• Information and
Communication Technology
• Governance of the
economy and institutions
Increased investment in the above four sectors is vital to the process of knowledge creation, knowledge absorption and knowledge utilization in increasing GDP, which in turn will have a high impact on the aggregate value of a country's goods and services and will contribute to the success of highly competitive and globalized countries.
1. human capital.
Human capital is the primary pillar
of the knowledge economy. If a country has to become a knowledge economy, all
its employees have to become a human capital.
Basic education is
considered essential to increase the ability to acquire and use information.
Secondary and tertiary education is based on creativity, critical thinking,
problem solving, and innovation. Secondary technical education, as well as
higher education in science and engineering, is seen as essential to the
development and application of new technologies. Today's knowledge revolution
makes continuing education and life-long learning essential. Old knowledge
expires and new knowledge has to be acquired by the grown-ups, otherwise it
will be difficult to live in harmony with the knowledge economy.
When a worker becomes a human
capital, he is found to be as productive as two ordinary workers, or as
productive as an employee who completes his work in half the time. Developing
countries are forced to compete with developed countries by rapidly absorbing
or developing knowledge. The best way forward is for countries to invest more
in human capital development.
2. The innovation system
The new development theories
emphasizes that technological development is an important source of
productivity development and an efficient innovation system is a potential
planet for such technological development. An innovation system is defined as
"the laws and procedures relating to the association of different
knowledge institutions and the collection, production, dissemination and use of
knowledge." "
That is, an effective innovation
system involving institutions, research institutions, universities, consultants
and other organizations is needed to benefit from the growing global knowledge
search, assimilate it to domestic needs and create new technology.
Both public and private
companies play an important role in the development of new technologies. An
efficient innovation system is a key factor that drives research and
development. The result is the production of new products and
new technologies.
In this way, the
innovation system is seen as an important source of technological development
and thus the technology generated by the innovation system contributes to
growth and development.
For developing countries, innovation-based knowledge and technology comes from foreign sources, through foreign investments, imports of equipment, and rights agreements.
The World Bank Group
defines information and communication technology as "the hardware,
software, networks, and media necessary for the collection, storage,
transmission, and delivery of information in the form of images, letters,
figures, and sounds.
Information and
communication technology is the fuel of development in various spheres of the
modern world. Communication technology has spread amazingly fast, reaching
almost every common person in the world, in a way that no other technology has
ever achieved. "
Some claim that
traditional technologies are superior to new information and communication
technologies, for the sole reason that modern communication technologies have
an adverse effect on people's social, cultural, values, and thinking. "
It is true that when
information and communication technology is used in all sectors, it is not
possible to say that it will have an immediate positive effect on the country.
How do we use information technology?
Our success depends
on the technology we use. "
4. Economic and
Institutionalized Governance
The last and most
important pillar is economic and institutional governance. Economic and institutional
governance requires economic agents for the creation of knowledge and efficient
use of knowledge. These agencies should create an environment for knowledge
creation and its effective use, and should have transparent policies,
competitions and regulations. "
Economic governance
requires "open international trade that promotes competition and
entrepreneurship, and freedom from divergent security policies."
Government spending and budget arrears should be consistent. Inflation should
be stable and low. The domestic price should be freely determinable by the
questioning powers without any control. "And the currency substitute must
be stable and able to express the true value of the currency. The financial
system should be one that allocates more resources for more profitable
investments.
An institutional regime is
"an effective, just, and corruption-free government and legal system that
protects property rights and enforces and facilitates business rules."
Also, intellectual property rights in a country must be protected and enforced strongly. If they are not protected, researchers or scientists will have little interest in developing new technological knowledge. "This will have an adverse impact on new technological innovations as well as economic growth.
knowledge economy
measurement system (AM)
The transformation of a
country into a knowledge economy requires an appropriate long-term policy
strategy to strengthen the four pillars of the knowledge economy. Basically, it
assumes that a country needs to understand its strengths and weaknesses. Only
then should appropriate policies and investments be made so that the country
can move towards its goal. Developed by the World Bank on the theme of
"Knowledge for Development," the project has developed indicators and
data to measure the progress made by countries around the world in relation to
the four intellectual property pillars mentioned above. A knowledge assessment
methodology thus developed is an online tool. It covers a large number of
factors relevant to the knowledge economy. It provides a basic assessment
method for determining whether countries and regions of the world are ready to
become a knowledge economy. Based on the four-pillar framework, this method
helps the countries of the world to know their strengths and weaknesses and
compare their performance with other countries. It also helps the world's
policymakers identify their countries' problems and opportunities. This assessment methodology indicates
the areas in which investments and policy initiatives are needed to move
towards a knowledge economy.
The knowledge assessment
methodology includes 80 structural and qualitative variables that reflect the
four pillars of the knowledge economy. It currently covers 128 countries and 9
territories. The values of all the variables are between 0-10. A value of 10
indicates that the variable is well developed, while a value of 0 indicates
that the development of the variable is very slow. Comparisons between
countries based on these variables are made with the help of maps and diagrams.
This empirical assessment methodology is used by most government
administrations, policymakers, researchers, community representatives, and
the private sector.
Basic Stats Card
An important form often
used in knowledge assessment methodology is the basic statistics card. This
chart shows the performance of a country or region in relation to the four
pillars of the knowledge economy. The basic statistical card used for knowledge
assessment methodology is found to contain 14 high-quality variables. Two of
them refer to the activities of the country and the remaining 12 to your
knowledge. Each of these 12 pillars consists
of 3 variables. "
|
Average annual |
|
·
GDP growth rate ·
Human Development Index |
|
Economic
and Institutionalized Governance System |
|
·
Solution and Non-Solution ·
Regulatory Quality ·
Rule of Law |
|
Education and Human
Capita |
|
·
Adult Literacy Rate (Percentage
above 15 years) ·
Number of students enrolled in
post-secondary education ·
Number of students enrolled in
tertiary education |
|
The number of researchers |
|
·
engaged in research and
development is how many per million people ·
License applications approved by
the USPTO are how many people per million people ·
Scientific and technical journal
articles are how many people per million people. |
|
Communication Technology |
|
·
Telephone (main connection +
mobile) - 1000 persons ·
Computers - 1000
persons ·
Internet users - 10000 persons
|
Knowledge Economy Index
The World Bank has also developed a
detailed economic index for its knowledge computation methodology. The
Knowledge Economy Index is an overall indicator that shows the overall level of
development achieved by a country or region in the knowledge economy, i.e. the
overall development of a country based on the activities of each country in
relation to the four pillars of the knowledge economy. The index is based on 12
basic variables of the knowledge assessment methodology. The index is
calculated on a scale of 0 (weak) to 10 (strong). * If the knowledge economy
index is very close to 10, then all the four pillars are well developed in the
country, and if the point is close to zero, then the development of all the
four pillars is low.
The numerical chart illustrates the
sub-indices used for computing the Knowledge Economy Index and the variables
used for computing the sub-indices. It also shows that the knowledge economy
index is obtained by combining the economic and institutionalized governance
index with this knowledge index and the sub-indices included in each index.
Countries at the top of the knowledge
economy ranking
Sweden - The Highest Source of Knowledge
Sweden ranks first in the world in
the knowledge economy according to the 2012 ranking of countries based on the
Knowledge Economy Index. The country's knowledge economy index is 9.43. Sweden
is particularly strong in information and communication technology and
innovation. Sweden is ranked second in the world. However, in terms of
education, Sweden slipped from 3rd place in 2000 to 6th place in 2012. The
increase in the number of Internet users has been a major factor contributing
to the increase in information and communication technology in Sweden.
Similarly, Sweden has a strong position in the Innovation Index, especially in
research articles, patents, science and engineering. Similarly, the drop in
Sweden's education index is due to the number of students enrolled in secondary
and tertiary education. The total number of students enrolled in secondary
education has fallen from 152% in 2000 to 103% today. At the same time,
although the number of people enrolled in tertiary education has increased over
time, its growth has been low compared to other countries.
The top 5 economies of knowledge
The Nordic countries
The Nordic countries are
at the top of the knowledge economy index. Finland is ranked second, followed
by Denmark and Norway in third and fifth place respectively. It is noteworthy
that these countries are in a position of strength on all four pillars and
continue to maintain that strength. All these countries are strong in terms of
economy and institutionalized governance. In 2012, Finland was ranked second in
the World Intellectual Property Index, up six places compared to 2000. The main
reason for this development is the progress made in the pillars of economic and
institutionalized governance, education and information and communication technology.
Denmark has experienced a dramatic growth in the economic and institutionalized
governance pillar. It moved up eight places from 2002 to third place in 2012.
However, it slipped 10 places to 13th position in the Information and
Communication Technology (ICT) category.
Top 10 countries that moved down in
the index ranking
Norway
moved up two places from 2000 to 5th in 2012.
The main contributing factor to this is the increase in the economic and
institutionalized governance pillar.
However, it has been ranked 17th in the Innovation and Information
Technology pillar. This is one of the
lowest rates in the North Atlantic.
United States
Due
to the weakness of the United States on all four pillars, the United States is
lagging far behind in the ranking of countries based on the Knowledge Economy
Index. The United States has slipped from first place in 1995 to fourth place
in 2000 to 12th place in 2012. However, it remains relatively high on the
Innovation Index (6th place). For the United States, except for the Innovation
Pillar, the other three are ranked below the top ten. The United States has
fallen from first place in 1995 to 18th place in 2012, due to relatively little
progress in information technology. For example, the number of telephone users
per 1000 population was 1070 in the year 2000. This has increased to 1470 in
2012. This increase is very small compared to other countries during the same
period. At the same time, the economic and institutionalized system of
governance has declined due to an increase in solution and
non-solution constraint.
The top 10 countries in each category
Countries with high growth and decline in the knowledge economy
Singapore ranks first among 146 countries in the pillar of economic and institutionalized governance. Singapore ranks high on all three of the key indicators included in this pillar. It scored 10 points on indicators such as solution and non-solution constraints and regulatory quality. Switzerland has been ranked first in the Innovation Index. The main reason for this is the huge increase in the publication of scientific and engineering research papers. It published a record 1218 articles per million people in 2012, compared to all other countries. New Zealand has been ranked first in the education index. Australia is very close to that. In both countries, the average school year is much longer (12.7 years) than in the rest of the world. In terms of information and communication technology (ICT), Bahrain has improved its ranking from 40th in 2000 to 39th in 2012. The main reason for this growth is the rapid increase in the number of Internet users per 1000 people. The number of Internet users per 1000 people is said to have increased by almost 10 times. The number of Internet users has increased from 60 per 1000 in 2000 to 820 in 2012.
Russia is ranked 55th in the world in the knowledge economy index. This decline in Russia's efficiency is due to the weakness of the economic and institutionalized state. Russia's score is just 2.23. In the case of Russia, it is in the weakest position in all three variables. This explains why there is no institutionalized environment necessary for a knowledge economy. Further, the decline in the number of years of average schooling and the number of students enrolled in post-secondary education resulted in the education pillar falling 17 places from 2000 to 44th in 2012. However, it has registered an increase in the Information and Communication Technology pillar. It has won 19 seats. The main reason for this is the rapid increase in the use of mobile phones.
Brazil's current knowledge economy index is 5.58, down one place from 2000, and in sixth place. At the same time, it has moved up by 7 places in the education index. This improvement is due to an increase in the average number of years of schooling and an increase in the rate of enrolment in Grade 3 education. Brazil lags far behind on all four pillars of economic and institutionalized governance. The main reason for this is the relatively high level of trade barriers.
Advances in Sri Lanka's knowledge economy
India has slipped from 2000 rank to 110th rank in 2012. However, due to the increase in the number of patents issued by the US Trademark and Patent Institute, it has moved up 20 places from 2000 to 76th position in the Innovation Index. However, India's economic and institutional governance pillars and the ICT pillar have registered a slight decline, both of which are down by 4 and 8 places respectively compared to 2000.
China moved up seven places to 84th in 2012,
driven by growth in the pillars of innovation, education, and economic and
institutionalized governance. The rise in China's innovation index is due to
the rise in all 3 variables included in the innovation index. At the same time,
China's IT index has slipped 14 places from 2000 to 2012. Ucrain's Knowledge
Economy Index was 5.73 in 2012 and ranked 56th. It is noteworthy that Ukraine
ranks first in the knowledge economy ranking among low- and middle-income
countries. This progress of Ukrayin is due to the high growth it has achieved
in the education index. In 2012, Ukraine was ranked 21st in the education
sector. A major factor contributing to this is the increase in the number of
people enrolled in tertiary education. At the same time, the Economic and
Institutionalized Governance Index improved by 10 places in 2012
compared to 2000.
Introduction of Knowledge Economics !
No comments