– Knowledge input is ever expanding in tandem with technology and innovation
Knowledge is information that is interpreted and used by decision-makers to meet their goals.
It is a public good, in that, there is no additional cost when shared with other users and others cannot be excluded from using it once it is created.
Knowledge is generally divided into two types, namely, knowledge about technology and knowledge about attributes or tacit knowledge.
The latter refers to knowledge gained from experience and which is often a source of competitive advantage.
Characteristics of a knowledge-based economy:
- Have abundant resources. Unlike most resources that deplete when used, the knowledge input is ever expanding in tandem with technology and innovation.
- No location barrier. Innovation in technology opens access to resources and markets all over the world, creating virtual market places and organizations. There will be increased mobility of workers and capital.
- A highly educated labour force. The knowledge economy comprises a better-informed populace as the government invests more on human development. Workers contribute to ideas, skills and knowledge by using latest technology.
- A high level of per capita wealth. Knowledge-based investments generate increasing returns to scale and therefore, more wealth for all.
- Open cosmopolitan society attractive to global talent. There will be ample opportunities for locals to tap foreign knowledge and learn of best business practices as world-class infrastructure will encourage foreign investment. The population will be willing to accept and put into practice new ideas and technologies and hence, local companies will become fit and fully equipped to face global challenges.
- Well connected to other global knowledge nodes. Connectivity to the rest of the world and technology sharing as well as technology transformation will be made easy with the free flow of information with lower cost, and reliable infrastructure encourage information and technology sharing.
- A shift from top-down hierarchical organizational structures to flatter shared-structures such as networks of semi-autonomous teams. IT development and communications technology will lead to better interaction among workers and there will be active involvement of workers in contributing ideas and decision-making.
- Skills and knowledge are key assets. Skills and knowledge become the main assets for the economy to gain competitiveness.
- Information and communications technologies (ICTs) are pillars of the knowledge-based economy. Access to networking is essential in acquiring and disseminating knowledge and the Internet is a key driver of ICT especially in the development of E-based activities, resulting in new approaches to doing things.