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Rise of Knowledge Capital
A Shift From A Physical World To A Knowledge World
We are now, however, experiencing a shift from a world largely dominated by physical resources to a world that values knowledge and intellectual resources. In a post-industrial society, goods are being replaced by services. This chapter illustrates the impact that the knowledge industry has on work and on jobs and defines knowledge, presents its key characteristics, and establishes the economic value of knowledge.
The knowledge economy is the sector of the economy that is based on information (rather than financial resources). It’s built from a global network of brainpower. And it’s worth quite a lot. Increasing number of knowledge workers in innovation has accelerated the creation of markets for disembodied (intangible) intellectual assets and for the skills and innovative finance needed to produce and use these assets effectively.
In a knowledge economy, there are two kinds of ‘money’ (i.e. knowledge). There’s explicit knowledge, which means proven facts, figures and data. Additionally, there’s tacit knowledge, which refers to your experience and understanding of how things work.
The Knowledge Economy Is Based On Four Pillars:
- Education & Training: The more educated and knowledgeable an employee is, the more they’ll be able to utilise their knowledge effectively.
That’s where we come in! Through Simon-Erdős School of Design Sciences, you build your capabilities and organizations build employee’s knowledge and provide the skills that company workforce needs.
- Information Infrastructure: This is the structures and processes that you have in place to facilitate communication. It can range from the internet to the Internet of Things (IoT) and is key to a knowledge economy’s growth.
After all, effective communication in a company can increase productivity by as much as 25%.
- Economic Incentive & Institutional Regime: Any healthy economic environment is reliant on the free flow of information. To enable this, investment must be made in technology and entrepreneurship. This incentivises innovation and helps to push businesses forward into the future.
Additionally, through the use of technology, the knowledge economy is able to transcend geographical boundaries. These boundaries are often damaging to the economy. For example, deficient language skills cost an economy almost $63 billion annually. Using technology to encourage better links with international workers helps to minimise the impact of this loss.
- Innovation Systems: The knowledge economy needs support to help surface, assimilate and adapt information to meet its ends.. Supporting vessels include think tanks, research centres and knowledge groups. Multiple studies show that investing in technical knowledge has positive effects on a country’s GDP.
For example, a World Bank study found that investing a 1% increase in the ratio of total R&D expenditure increases the growth rate of GDP by 0.78 percentage points.
Knowledge As Digital Mindset
With the rise of artificial intelligence [AI], machine learning [ML] and “physical-digital” products, services and functions, companies can increasingly leverage their intangible assets in more valuable ways automatically. Individuals network with others; pooling data to build new intangible products and services harnessing AI/M. This pooling will create ever more complex chains of companies closely interfaced together. We prepare individuals and firms across all sectors that are disrupting their market and making significant investments in the form of new-generation software assets.
