Modern knowledge economy - what is it? Concept, essence of the system, formation and development

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:55

In the 21st century, the level of development of the knowledge economy will be the main competitive advantage. The main resources already now for global companies are knowledge and human capital. Leading experts are working on this issue. Many countries and entire integration associations (the European Union) are sure that the knowledge economy is the best and only way to gain competitive advantages in the global market. Countries and companies are investing more and more in research and development, protection of acquired knowledge. It is believed that 90% of the knowledge of mankind was obtained in the last thirty years, 90% of engineers, scientists and researchers trained in the entire human history are working in our time.

Development history

No country has fully passed the long way to the knowledge economy. In general, the whole world is at the stage of transition to a post-industrial society, the main feature of which is a decrease in the shareproduction by increasing the share of the service sector. The average share of the service sector in the world is about 63%. Of course, there are countries with a high level of services, but only because the population is not available for employment in other sectors. For example, Afghanistan (56% - services). And this is not a post-industrial country. The poorest countries have pre-industrial economies. These are mainly commodity countries. Part of the island states of Oceania generally live at the expense of donors. Many countries in Asia and Latin America are at the industrial stage. Developed countries are already at the stage of post-industrial economy and the stage of transition to the knowledge economy.

Definition

The knowledge economy is a system in which knowledge and human capital are the decisive factor and source of development. Such an economy is aimed at the production, renewal, distribution and application of knowledge. The term itself was coined by Fritz Machlup in 1962 to refer to the sector of the economy that produces, processes and manages knowledge. Closer to the 90s, the Economic Cooperation Organization began to use the term to analyze the elements of public policy. According to this organization, the knowledge economy is an economy that stimulates the acquisition, creation and dissemination of knowledge to accelerate economic and social development.

Functions

Knowledge must be distinguished from information. Knowledge is the result of human intellectual activity. Information is a source for production and a way to store and transmit the result.mental activity. Knowledge in the knowledge economy is both the result of activity, and a consumer product, and a factor of production, and a product, and a means of distribution. That is, knowledge, if we take the ideal case, acts as a "raw material", which, with the help of another knowledge (production factor), is processed into new knowledge (product) and then distributed using a third type of knowledge. Of course, in other cases, knowledge can be used separately at any stage. Also important functions are the use of knowledge as a means of managing and accumulating the results of intellectual activity.

Features

When considering a new type of economy, it is important to understand the essence of the new determinant factor of production. Knowledge (as a product) has a number of features that affect the process of reproduction and distribution. Any result of intellectual activity is discrete. It is believed that knowledge is either there or it is not, it cannot be divided into halves or quarters. In addition, knowledge (as a public good) is available to everyone after its creation. Although it takes time for its distribution and consumption, especially if it is a complex product. Knowledge (as an information product) does not disappear after consumption. This is different from material products.

Key Features

The most developed countries of the world are gradually approaching the stage when knowledge will be the main driving force of the economy. The main features that characterize the modern knowledge economy:

The dominant position of the service sector, in the developed countries of the world, the share of the service sector is already about 80%.
Increase share of spending on education and research, for example, South Korea predicts that in the near future the entire population will receive higher education.
Explosive growth and proliferation of digital technologies, information and communication industries are used to drive the knowledge economy, in everything from agriculture to medicine.
General distribution of communication networks to organize communication between specialists, the company and customers.
Enlargement of markets, the creation of regional associations, more and more integration associations are being created, because it is difficult to produce many intellectual products using only the resources of one country.
Increase in the number and importance of innovation, the increasing use of the results of intellectual work for the production of new products.

Basis

For the development of a new stage in the organization of social production, it is necessary to create a foundation, the basis of the knowledge economy, on which it will be possible to place other elements of the new production order. The following fundamental elements are distinguished:

institutional structure, a system of economic incentives and public policies should be created to promote the production, dissemination and distribution of knowledge for the production of products;
innovative system, it is necessary to create conditions for reproduction andreceptivity of the economy to new technologies and new products;
education and training, the knowledge economy system cannot be built without one of the main resources - qualified labor resources;
information infrastructure and digital technologies are the main tools for the production of knowledge and knowledge products.

Institutional structure and education

The state's ability to perceive innovation must be prepared by a set of measures to create an economic environment that stimulates the creation of intellectual products, a legal environment that provides protection and intellectual product distribution. It is also important to ensure the general freedom of entrepreneurship and ease of doing business, including the absence of obstacles to starting a business, access to financing. To create an infrastructure that directly creates and disseminates new knowledge, the state creates development institutions: entrepreneurship support funds, business incubators and technology parks.

The key place in the system of the knowledge economy is occupied by human capital, which is the main factor of production. In developed countries, almost the entire population is covered by secondary education, a significant part of higher education, in addition, there are vocational training systems.

Innovation system

The development of the knowledge economy directly depends on the quality of the national innovation system, which is formed on the basis of often-statepartnerships. The state, in consultation with the high-tech sector, develops and implements a policy that is as friendly as possible to innovation. It finances universities, research centers, venture capital companies that adapt global knowledge, create their own knowledge and develop new technologies and products based on the findings. Innovation support institutions are being created: investment funds to finance venture projects, co-working spaces, technology parks and high-tech industrial complexes. Private business participates together with the state in the financing and management of these innovative structures or creates their own.

Information infrastructure

The main distribution channel and tool for creating new knowledge is information and communication technologies. The main product that is reproduced in the knowledge economy is also either ICT technologies or services provided using ICT technologies. The level of development of digital technologies determines the receptivity potential of the new economic order. The pace of the formation of the knowledge economy is directly dependent on the level of development of digital technologies.

Background

Countries that have entered the era of the knowledge economy are at the stage of transition to a new level, relatively few, usually the United States, Germany, South Korea and Japan are mentioned. For the transition of the state to the knowledge economy, the conditions for such a transformation must be ripe. First of all, knowledge should be perceived by the economy as the most important resource, more important than others.resources (natural, labor, financial). An avalanche-like growth in the share of information technologies is superimposed on the high share of the service sector of the post-industrial society. There is an increase in investment in human capital, especially in specialization and training. Because more qualified personnel are needed to produce knowledge. Information and communication technologies penetrate into the fields of activity. If we take an industry such as the automotive industry, then almost all leading companies have already developed prototypes of unmanned vehicles that are controlled by artificial intelligence. At the same time, ICT is responsible not only for transport management, but can even maintain a conversation with the passenger. In the knowledge economy, the role of innovation is decisive, it is a factor and a source of development.

How to measure

Methodology for measuring how ready a country is for the transition to a new economic model was developed by the World Bank as part of the Knowledge for Development program. The calculation is based on 109 indicators, which are then formed into two indices:

Knowledge index shows how much a country can produce, accept and disseminate knowledge. The indicator takes into account the country's capabilities in the field of education and labor resources, the volume of innovation activity and the development of information and communication technologies.
The knowledge economy index shows how well a country can use knowledge for social development and economic growth. And also determines how close orthe country is far from the knowledge economy.

Bank research has shown a direct correlation between a country's level of readiness for a knowledge economy, its ability to grow economically, and competitiveness in the global market.

Innovation

The knowledge economy must constantly reproduce innovations, turning new knowledge into goods and services. That is, it is the economy of new knowledge. Innovation is knowledge turned into a commodity ready for promotion to the markets. Thus, knowledge is associated with effective demand and feedback is organized between the global market and the sphere of knowledge production. By the degree of innovativeness of the economy, one can say how much the country is immersed in the knowledge economy. Innovative development provides a competitive advantage: new products are developed and brought to market faster, more new technological solutions are used, high-tech products cost more and sell faster. In the rankings of the most innovative economies in the world, South Korea, Sweden, and Germany occupy the first places.

Almost a knowledge economy

South Korea has been named the most innovative economy in the world by the Bloomberg news agency for the third year in a row. The country ranks first in the world in terms of spending on research and development, obtained patents and high-tech industries, the second in terms of education. The country has the Ministry of Economy and Knowledge, which is responsible for economic and investment policy. The largest companies aim to sellof their accumulated knowledge, each of the firms has divisions that are engaged in the development of information and communication technologies and the sale of accumulated experience. For example, the largest steel company POSCO, having gained experience in the production of metal, began to offer services for the construction of metallurgical plants. After automating its production, it sells IT solutions and also sells management solutions. The main efforts of the country are aimed at reforming the structure of the knowledge economy, increasing the levels of use of critical technologies, including the use of artificial intelligence, the level of robotization (the country is still in first place in the world), unmanned aerial vehicles, cars, ships, financial services using IT.