THE “knowledge-based economy” (KBE) is one in which information and knowledge, rather than material resources, drive business activities while creating key sustainable competitive advantage.
Strong technological capability and an increasing emphasis on intellectual property, such as brand names, patents and software, characterise a knowledge-based economy.
It is also an economy with a vibrant entrepreneurial culture that thrives on creativity, nimbleness and good business sense. There is an enthusiasm for change, appetite for risk and tolerance for failure.
For economies of the future, knowledge will be the key to wealth and success. Fortunately for us, knowledge knows no barriers in terms of race, gender or geography.
In an era characterised by rapid change and uncertainty, it is claimed that successful companies are those that consistently create new knowledge, disseminate it through the organisation, and embody it in technologies, products and services.
A role for everyone
According to experts, 10 years ago, 85 per cent of the knowledge required by a worker to do his job was in his head.
Today, it is only 15 per cent.
In future, we will need to work more as teams — virtual teams led by those with the skills, not necessarily those with the right titles.
It is believed that in a knowledge-based economy, how people think and relate will ultimately determine success.
Individually, one can only achieve so much. But collectively, by leveraging one another’s knowledge, the possibilities are multiplied.
1. Roles for governments
The global knowledge-driven learning economy has put the focus on the regional aspects of economic growth. It has also shifted development perspectives from output to input factors as production has become more knowledge-based.
Researchers have sought a better understanding of how businesses and government institutions deploy their core resources and competencies and interact to accrue economic growth.
Governments should focus on two areas:
Have a better understanding of new paradigms, business needs and trends. All parties will benefit from continually reviewing regulatory frameworks to promote enterprise.
Invest in the science and engineering sectors. Governments should establish strong links with industry, and promote competition and collaboration.
2. Roles for businesses
To maintain competitiveness in response to changing consumer preferences and technological change, companies need appropriate organisational structures, a skilled workforce and an able management.
These changes are having a significant impact on the structure of employment and on the type of labour required. The most obvious manifestation of this is the increased demand for more highly educated and highly skilled workers.
The role for businesses is the creation of knowledge. Companies have to constantly think of clever ways to create and exploit intellectual assets to maintain their competitive edge.
There are three areas businesses should focus on. They include:
Investment in intellectual assets. These can be human capital and include competencies, skills and know-how. Businesses can also invest in structural capital. By this, we mean systems and processes, which will allow innovative ideas to bubble up. Businesses must also invest in customer capital. This includes building close customer relationships, loyalty, brands and trademarks.
Collaboration and networking. Businesses must work with universities, research institutes, suppliers, customers and even competitors to strengthen access to new technologies, markets, capabilities and talents. This would mean more outsourcing and more specialisation, possibly on the various aspects of the firm’s value chain.
Creating the right work environment. It is one which encourages employees to be creative and allows them to make genuine mistakes and learn from them.
3. Roles for the workforce
A group of “knowledge workers” can be identified as those performing knowledge-rich jobs. Such workers are typically well-educated.
There are “workplace competencies” needed in the knowledge economy. Communication skills, problem-solving skills, the ability to work in teams and infocomm technology (ICT) skills, among others, are becoming important and complementary to basic core or foundation skills.
For the workforce, there are three areas of focus:
Critical thinking. A knowledge worker is first and foremost a thinking worker. He is not just diligent but also inquiring. He asks not only what to do, how to do, why a job or process is done in a particular but why it needs to be done at all.
Life-long learning. The measure of a knowledge worker is not just competitive wages, but competitive capabilities. Hence, life-long learning and professional development is critical for a knowledge worker.
Courage to try and fail. A knowledge worker needs an entrepreneurial spirit. And whether workers adopt the mindset of owner or employee will be determined by how work and the workplace are organised.
Tomorrow: Career management in a knowledge-based economy