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A number of New Zealand businesses had been identified as being highly innovative and leading their fields as a result of the knowledge and intellectual creativity that went into their products and services. The resulting success is seen as a pathway for others to follow.

Various observers describe today's global economy as one in transition to a "knowledge economy", or an " Information Society ". But the rules and practices that determined success in the industrial economy of the 20th Century need rewriting in an interconnected world where resources such as Know-how are more critical than other economic resources.


CONCEPTS


A key concept of this sector of economic activity is that knowledge and education can be treated as:

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

  • A productive asset



DRIVING FORCES

Commentators suggest that at least three interlocking driving forces are changing the rules of business and national competitiveness:


As a result, goods and services can be developed, bought, sold, and in many cases even delivered over electronic networks.

As concerns the applications of any new technology, it depends how it meets economic demand. It can stay dormant or get a commercial breakthrough (see Diffusion Of Innovation ).


CHARACTERISTICS

It can be argued that the knowledge economy differs from the traditional economy in several key respects:

  • The economics is not of scarcity, but rather of abundance. Unlike most resources that deplete when used, information and knowledge can be shared, and actually grow through application.

  • The effect of location is either

  • ---diminished, in some economic activities: using appropriate technology and methods, virtual Marketplace s and virtual organizations that offer benefits of speed, agility, round the clock operation and global reach can be created .

  • ---or, on the contrary, reinforced in some other economic fields, by the creation of Porter's Cluster s around centers of knowledge, such as universities and research centers having reached world-wide excellence.

  • Laws, barriers and taxes are difficult to apply on solely a national basis. Knowledge and information "leak" to where demand is highest and the barriers are lowest.

  • Knowledge enhanced products or services can command price premiums over comparable products with low embedded knowledge or knowledge intensity.

  • Pricing and value depends heavily on context. Thus the same information or knowledge can have vastly different value to different people, or even to the same person at different times.

  • Knowledge when locked into systems or processes has higher inherent value than when it can "walk out of the door" in people's heads.

  • Human capital -- competencies -- are a key component of value in a knowledge-based company, yet few companies report competency levels in annual reports. In contrast, downsizing is often seen as a positive "cost cutting" measure.


These characteristics require new ideas and approaches from policy makers, managers and knowledge workers.


SIMILAR CONCEPTS


Other terms for the concept include "Knowledge Society" and "Knowledge Wave", as in catching or riding the "knowledge wave" in a similar manner that a Surfer catches and rides a surf wave.


EXTERNAL LINKS



REFERENCES