Knowledge-Based Economics - Benefits and Challenges.pptx

Knowledge-Based Economics - Benefits and Challenges.pptx

1. Knowledge-Based Economics Benefits and Challenges

2. Knowledge-based Economy In a knowledge-based economy, knowledge becomes the primary driver of value creation. Knowledge assets  such as expertise, intellectual property, databases, processes, and tacit know-how must be identified, stored, shared, and protected like any other economic resource. KM systems transform individual knowledge into organizational capital, enabling firms to reuse and leverage insights to improve efficiency, reduce redundancy, and innovate faster.

3. WHAT IS A KNOWLEDGE ECONOMY? A knowledge economy is a system of consumption and production in which intellectual capital is central (Hayes, 2024). It is an economy where knowledge is more important than raw materials or physical products. According to Raconteur (2014), we live in a knowledge society, where knowledge that cannot be found anywhere else is appreciated and prioritized. In a knowledge economy, employees’ intellectual capabilities are more essential than their physical abilities. How Big Is the Knowledge Economy? It's difficult to gauge the value of the global knowledge economy because it's not a clearly defined category such as manufacturing. However, one market research firm valued the 2024 global intellectual property market alone at $11.6 billion, with a projected value of $27.74 billion by 2033.[1] [1] Business Research Insights. " Global Intellectual Property (IP) Valuation Market Size, Share, Growth, and Industry Analysis, by Type (Patent Valuation, Trademark Valuation & Copyright Valuation), by Application (Corporate, Research Institute & University), and Regional Forecast to 2033 ."

4. CHARACTERISTICS OF AKNOWLEDGE ECONOMY According to Management Consulted (2023), a knowledge economy can be identified by 10 characteristics. Institutional structures that encourage entrepreneurship and knowledge consumption. Availability of skilled labor and a good education system. Provides access to Information and Communications Technology (ICT). Growth in demand for workers in STEM subjects. The development of ‘clusters’ in certain geographic regions. A vibrant innovation landscape that includes the academic work, the private sector, and civil society. An abrupt rise in the number of patents. Knowledge exchange between organizations. Producers and uses driven by innovation. The global spread of knowledge.

5. EXAMPLES OF A KNOWLEDGE ECONOMY

6. Knowledge-intensive Services services that involve activities that are intended to result in the creation, accumulation, or dissemination of knowledge, where knowledge-intensiveness refers to how knowledge is produced and delivered with highly intellectual value-add economic and professional services that rely heavily on professional knowledge, expertise, and specialized skills rather than on physical labour or machinery. These services are produced, delivered, and consumed through the intensive use of knowledge, often involving problem-solving, innovation, and consulting rather than standardized production.

7. Examples of Knowledge-Intensive Services Category Examples Description Professional & Business Services Legal firms, accounting, auditing, management consulting, architecture Offer expert advice, solutions, and analysis using specialized knowledge Financial & Insurance Services Banking, investment, risk management, insurance Use financial expertise and data analytics for decision-making and strategy Information & Communication Technology (ICT) Software development, data analytics, cybersecurity, cloud services Create and manage digital knowledge systems and technological innovation Education & Training Universities, corporate training, online learning platforms Produce and distribute knowledge directly through teaching and learning Health & Medical Services Hospitals, biotech, pharmaceuticals, medical research Use scientific and clinical expertise for patient care and research R&D and Engineering Scientific labs, research agencies, engineering consultancy Generate new knowledge through discovery, design, and innovation Creative & Media Industries Design, advertising, publishing, film, digital content Apply creative knowledge and intellectual capital for cultural and economic output

8. The Knowledge Economic Hubs Information technology in silicon valley, United States Aerospace and automotive engineering in Munich, Germany biotechnology in Hyderabad, India Electronics and digital media in Seoul, South Korea  Petrochemical and the renewable energy industry in Brazil .

9. Human Capital Development  In a knowledge-based economy, the collective skills, competencies, and experience of people becomes the most valuable economic asset. Unlike traditional economies where value came from physical labour or capital, here intellectual capability and learning capacity drive productivity and innovation. Developing human capital therefore means building a workforce that not only possesses knowledge but can create, share, and apply it effectively. This leads to the emergence of knowledge workers, which employees whose main contribution is the creation, analysis, and application of knowledge.

10. Knowledge Workers A knowledge worker is a professional who has the expertise in their field to "think" for a living through proper education and training. They differ from information workers, task workers, skilled workers and other specialty areas in that they can use their expertise to strategize work activities and develop plans of action to see work activities through to completion. In contrast, information workers, task workers and skilled workers work under knowledge workers to apply information, perform skilled work or complete specific tasks. A doctor examines a patient’s symptoms, interprets test results, and applies medical knowledge to diagnose and design a treatment plan. In carrying out that plan, nurses, lab technicians, and pharmacists perform supporting tasks such as taking vitals, preparing medications, or running tests. → The doctor is a knowledge worker because decision-making and specialized knowledge form the core of their work.

11. Challenges in Creating Knowledge Workers Skill Gaps  Rapid technological change outpaces education and training systems. Knowledge Hoarding Employees may withhold knowledge for personal advantage. Brain Drain Talented workers migrate to regions offering better recognition or compensation. Resistance to Learning Some organizations lack the culture or incentives for continuous learning. Employee Shortage Organization suffers from a lack of employee contribution to their knowledge-sharing efforts Failure of Management Commitment Senior leadership is responsible for embedding a knowledge-sharing culture but they may believe that knowledge is not relevant to their role or department.

12. Overcoming the Challenges To build and sustain knowledge workers: Invest in Education and Training From foundational skills to advanced digital literacy. Integrate KM Practices Embed knowledge sharing and documentation into workflows. Encourage Communities of Practice Let professionals share experiences across departments. Recognize Knowledge Contribution Reward not only output but also learning, mentoring, and collaboration. Leverage Technology Use KM systems, AI tools, and digital learning platforms for skill development.