Knowledge is an essentiality related to development. The three pillars of development which have already been identified by the United Nations (UN), are economic development, environment development and socio - cultural development. These three pillars should be put together for balanced development. Knowledge is critical to the strengthening of the three pillars. Knowledge, as it is applied in entrepreneurship and innovation, research and development, software and product design and in how people use their Education and skills, is now widely believed to be one of the key sources of growth in the global economy. For developing countries who prepare themselves to face the challenge of remaining competitive internationally, the knowledge and information revolution can contribute greatly to promoting economic growth and social development and to reducing poverty. For economic development, knowledge has become so important that a certain stage of development, the economy is characterized as a knowledge economy. This is a nuance that needs to be understood.
The knowledge economy is a system of consumption and production that is based on intellectual capital. In particular, it refers to the ability to capitalize on scientific discoveries and basic and applied research. Knowledge economy is an economic framework in which the creation, application and dissemination of knowledgegenerate prosperity. In this framework, doctoral students in the STEM(science,technology,engineering and mathematics) disciplines represent human capital of the highest value—heralding ‘a new class of entrepreneurial scientists’ who are expertly knowledgeable, engage with industry and assimilate commercial sensibilities into their everyday research practice. Thus, in a knowledge economy, a significant component of value may consist of intangible assets such as the value of its workers' knowledge or intellectual property. In the knowledge economy, innovation based on research is commodified through patents and other forms of intellectual property. The knowledge economy is confined but it is nlonger restricted to any particular sector of production. It does not even have a privileged association with industry, by contrast to services or agriculture, as mechanized manufacturing and industrial mass production did. It appears in every sector -- in knowledge-intensive services and precision, scientific industry as well as in high-technology industry. Nevertheless, in each sector it appears as a fringe from which the vast majority of the labor force remains excluded.
The knowledge economy addresses how education and knowledge, that is, "human capital," can serve as a productive asset or business product to be sold and exported to yield profits for individuals, businesses, and the economy. This component of the economy relies heavily on intellectual capabilities instead of natural resources or physical contributions. In the knowledge economy, products and services are based on intellectual expertise advance technical and scientific fields, encouraging innovation in the economy as a whole. Academic institutions, companies engaged in research and development (R&D), programmers developing new software and search engines for data, and health workers using digital data to improve treatments are all components of a knowledge economy. These economy brokers pass on their knowledge and services to workers in more traditional fields, such as farmers who use software applications and digital solutions to better manage their farm crops, advanced technological-based medical care procedures such as robot-assisted surgeries, or schools that provide digital study aids and online courses for students.
Four Crucial Pillars of Knowledge Economy
In order to move a country towardsbecoming a knowledge economy four key strategic reforms are needed. These reforms should create a knowledge economy supported by the following four pillars: policy and institutional framework, innovation systems, education and training, and information infrastructure.
Education and Training
Developing educated and skilled workers.Education is the fundamental enabler of the knowledge economy. Well - educated and skilled people are essential for creating,sharing,disseminating, and using knowledge effectively. The knowledge economy of the twenty - first century demands a new set of competencies , which includes not only ICT skills , but also such soft skills as problem solving , analytical skills , group learning , working in a team - based environment , and effective communication. Fostering such skills requires an education system that is flexible : basic education should provide the foundation for learning , and secondary and tertiary education should develop core skills that encourage creative and critical thinking . In addition , it is necessary to develop an effective lifelong learning system to provide continuing education and skill upgrading to persons after they have left formal education in order to provide the changing skills necessary to be competitive in the new global economy .Tertiary education is critical for the construction of knowledge economies. There should be investment in establishing top - quality university system and world - class institutions of higher learning that are competitive and meritocratic.
Creating an Efficient Innovation System
The innovation system in any country consists of institutions , rules , and procedures that affect how it acquires , creates , disseminates , and uses knowledge. It relates also to the application and use of new and existing knowledge. Innovation requires a climate favorable to entrepreneurs , one that is free from bureaucratic , regulatory , and other obstacles and fosters interactions between the local and outside business world and with different sources of knowledge , including private firms , universities , research institutes , think tanks , consulting firms , and other sources. The key drivers of innovation includes :Technology sector(nanotechnology, computers, networks and biotechnology),preparation of Intellectual human resources(young in research and development, and innovation),public and private sector funded Research&development ,and Global competitiveness (technology development is key factor)
Building a Dynamic Information System
Rapid advances in ICTs are dramatically affecting economic and social activities , as well as the acquisition , creation , dissemination , and use of knowledge , it has become an essential backbone of the knowledge economy . The information infrastructure in a country consists of telecommunications networks , strategic information systems , policy and legal frameworks affecting their deployment , and skilled human resources needed to develop and use it .
Policy and Institutional FrameworK
Strengthening economic and institutional regime.Taking advantage of the knowledge revolution's potential hinges on effective economic incentives and institutions that promote and facilitate the redeployment of resources from less efficient to more efficient uses . This fundamental pillar of the knowledge economy provides the overall framework for directing the economy . Important elements of the economic and institutional regime include macroeconomic stability,competition, good regulatory policies, and legal rules and procedures conducive to entrepreneurship and risk taking. A key feature is the extent to which the legal system supports basic rules and property rights.
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