Information and Communication Technology, and the Knowledge Economy
"If there is a major driver of the
knowledge economy, it is not just education, but technology – the diffusion and use of information and communication technology (ICT) in particular. ICT greatly enables the growth of knowledge work. For example:
- The Internet erodes at least one of the reasons for corporate hierarchies – the need for many layers for passing information up and down the organization. This, in turn, enables decentralized, autonomous teamwork to occur – encouraging new ideas and innovations from where they originate, employees themselves.
- At the same time, the Internet enables networks to form and, of course, to form in real time anywhere in the world – and this accelerates the flow of information and probably as well the rate of innovation and knowledge creation."
(Buttler, F.,
ILO, visited 2007-04-09)
"Many ICT-enabled services are increasingly tradable as a result of these technological advances in ICTs, combined with ongoing liberalisation of trade and investment in services, and services activities are globalising rapidly as a result as certain types of services can now be produced from remote locations. […] India in particular is receiving much attention in the context of the ICT-enabled offshoring of services, especially since there appears to be a movement up the value chain, but other countries are also emerging as new players."
(Organization for Economic Co-operation and Developement (OCDE),
ICT-Enabled Offshoring, visited 2009-08-03)
"As Africa strives to bridge the digital divide and to enter into the global information
knowledge economy, it is important to identify key sectors and opportunity areas for the introduction of information and communication technologies."
(Economic Commission for Africa,
Land Management Information Systems in the Knowledge Economy, United Nations, visited 2009-08-03)
The Need for Highly Skilled Personnel
The
knowledge economy relies on highly qualified and innovative people. These people can pool their knowledge remotely through communication technologies, but this is not always feasible.
"Despite all the advances of modularity over the past twenty years, there remain many activities in which processes and connections among them cannot be captured and expressed in digital codes. These are areas on the cutting edge of technology where knowledge has not (or has not yet) been standardized, or areas involving continuous back-and-forth between engineers and workers involved in different functions – like design and manufacturing. When coordinating the different phases of production from design to market still depends mainly on knowledge, judgment, and craft of experienced employees, it helps to have human beings meeting face-to-face and working out problems, rather than communicating over the Internet. There's likely to be a high premium on recruiting and retaining people with high levels of technical training."
(Berger, S.,
How We Compete: What Companies Around the World Are Doing to Make it in Today's Global Economy, Doubleday Broadway, 2005, p. 218)
When there is no clean hand-off possible between R & D (research and development) and commercialization, when the information needed to move from a prototype to producing on a larger scale cannot be standardized and translated into digital code, outsourcing is not possible, nor is offshoring, because many of the needed skills cannot be found elsewhere. Also, firms want to protect intellectual property and see the dangers of joint ventures and outsourcing. Once the production process can be fragmented, people with specific talents and expertise can be located in one part of the organization, while other activities can be dispersed.
(adapted from Berger,
op. cit., p. 220)
Challenges Facing the Knowledge Economy
"The existence of a 'digital divide' is likely to be a major barrier to the growth of the
knowledge economy. […] The digital divide is characterized by a high and positive correlation between two things – the absence of hardware infrastructure, and the absence of education and skills.
[…]
In a technology-driven
knowledge economy, some negative consequences can be anticipated. One of these might be called 'time compression.' The ubiquity of information, the ubiquity of competition, and the mental effort required to develop knowledge products is beginning to put pressure on us, and this, in turn, is showing in higher levels of stress."
(Buttler, F.,
ILO, visited 2007-04-09)
Industrial Property, Intellectual Property, and Patents
"In June 2000, the UK National Skills Task Force produced its final report setting out its proposals for a new national skills agenda intended to develop the UK as a
high-skill, high-value-added ‘
knowledge economy' in the 21st century."
(European Industrial Relations Observatory Online (Eironline),
National Skills Task Force Issues Final Report, 2000, visited 2011-08-03)
However, "the president of the European Patent Office […] recently warned that for Europe to achieve its goal of having the most advanced
knowledge-based economy by 2010, it must devote more attention to developing patents for its research results."
(European Commission,
Patents Key to Unlocking Europe's Knowledge Economy, visited 2010-08-03)