What Is Knowledge Based Economy and How Can We Benefit From Its Coming?
Posted: Sunday, March 26, 2006
by john rowes
http://www.acintelligence.com
It has been a long time since the coming of knowledge-based economy was announced. The major change that is said to turn a society upside down is upon us now. But what does knowledge-based economy really mean?
Definition
Knowledge based economy is a kind of economy based solely on the production, distribution and the use of knowledge. In short, it means that the most important thing in the coming economy model will be knowledge and skills, not the material products.
At first it may seem that there is only little difference between a normal economy model and a knowledge based one. In both we just create, buy and sell the products, and their nature seems to be exactly the same. But as we take a closer look, things change. There are a few reasons for that:
1. Knowledge is easily copied. If you've had a good idea, everyone will quickly adopt it unless you do something to prevent it.
2. Knowledge comes through the borders easier than material products. While Chinese are dangerous only to a few sectors of the US economy, knowledge-based economy model calls for moving most of jobs away from US to those countries that have skilled workforce, but are much cheaper than US (India, and eastern part of EU are the good examples of such places).
3. The knowledge is quickly becoming obsolete. You need to be prepared for constant creation of knowledge if you hope to keep up with your competitors.
How to cope with knowledge problems in your company and benefit rather than suffer from the incoming changes?
In short, knowledge based economy will create a lot of problems for small and large companies alike. Counterfeits and violation of your copyrights will eat your profits, most of your contractors will move their orders abroad and the situation in your company (and the whole economy) will change at the speed of light.
However instead of fighting the inevitable we can profit from that. The coming of a new economy model will create as many new possibilities as problems.
1. You will be able to use outsourcing to minimize your cost. In the effect you will be able to offer lower prices while still having an upper hand because of running a business in US.
2. Instead of preventing everyone from using your ideas, go for paid Internet-sharing and let everyone profit from your concepts. Or leave it altogether, offer your ideas for free and profit from the advertisements and high traffic on your website.
3. With coming of knowledge based economy business management has become easier than before. Internet and cell phones make contacting anyone anywhere anytime possible. Use it!
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Top-level comments on this article: (3 total)This article is of immense help for me since i m doing M.B.Afrom a reputed institute from delhi and so many time i have assigned such type of article to express our own views on it and if things written to the point then i m rewarded deserving marks which is quite necessary for me .i have gone through this article thrice to clear my doubts and accumulate more and more knowledge so that i could participate in upcoming essay contest that is scheduled to be held in our campus.
I found this to be a helpful article. However it lacks examples in terms of statistics and other real cases. Further, it treats issues like out sourcing too frivilously and ignores its impact on organisations and worker moral. Take the US for example, How is it that a highly developed KBE is suffering economically? The easy answer is that other labor is cheaper. However, one of the greatest issues of Knowledge theft (example China) is hardly dealt with.
Thank you for the article.
From the education point of view we must develope Gifted Education systems as critical mas towards knowledge bades economy.
I hope Gifted Worlds wil do so and specialy in th 3rd world
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