Whenever I find new concepts in my reading texts, I realize how fast this world works. If the reality were the same, I think we wouldn’t need new words to design this forever lasting world…But new concepts knock at the door and somebody has to welcome them. Say “hallo” to knowledge capitalism, knowledge economy and knowledge society!
It is Michael A. Peters who explained how these new concepts arrived at the world’s door and how the State deals with them in Policy Future in Education, chapter Education Policy in the Age of Capitalism.
The knowledge economy concept was born 50 years ago. His father’s name is Friedrich Hayek…too famous not to heard of him…
Although he considered himself a classical liberal, he is saw as one of the most influential economist to shape what is now understood as neoliberalism. His work is regarded as a starting point for contemporary economics of knowledge and information. His early work emphasized that the key to economic growth is knowledge and the way to knowledge is the power of market itself. In the paper entitled “The use of knowledge is society” (1945), Hayek raises the classical argument against central State planning.
His position is based on:
- The nature of knowledge: “knowledge is not given to anyone in its totality”, it has a local character. “He emphasizes the importance of knowledge of particular circumstances of time and place, which constitutes the unique information which every individual possesses and he champions practical and contextual “local” knowledge (unorganized knowledge) against the scientific or theoretical knowledge, as an understanding of general rules, in economic activity.”
- Evolutionary economics concept, for he considers the pricing system as an institution that has developed as means of communicating information where prices act to coordinate the separate actions of different people in the same way as subjective values help the individual to coordinate the parts of his plan. So, liberal democracy, science and the market are such spontaneous self organizing systems based on the principles of voluntary consent that serve no end beyond themselves.”
So, due to the knowledge local character and the spontaneous self organizing system, knowledge society requires a free market where State should not get involved at a central level.
“In 1947 Hayek set up the very influential Mont Pelerin Society, an international organization dedicated to restoring classical liberalism and the so called free society, including its main institution, the free market. In his vision, a welfare orientation would fetter the free market, consumed wealth and infringed the rights of individuals.”
OECD report “The knowledge-based Economy (1996) has a different conception about the relation between the State and this new knowledge economy. But the main position reinforce the recommendation that the State should avoid a central coordination of this type of economy.
In the knowledge-based economy, there is an interactive model of innovation functioning which consist of knowledge flows and relationship among industry, government and academia in the development of science and technology. IN OECD’s vision, knowledge based economy has the following characteristics:
- The economies are more strongly dependent on knowledge production, distribution and use then ever before
- Knowledge-intensive service sectors (especially education, communication and information) are the fastest growing parts of the economies
- Knowledge (as a broader concept than information) can be considered in term of know what and know why, embracing both factual knowledge and scientific knowledge. “Other type of knowledge is know how and know who are forms of tacit knowledge which are more difficult to codify and measure. The OECD report indicates that Tacit knowledge in the form of skills needed o handle codified knowledge is more important then ever in labour market.
- “Education will be the center of the knowledge based economy and learning the tool of individual and organizational advancement
The relation between economy and knowledge economy is as obvious as their name show it. So, all the major economical organization are invited to have a point of view, a perspective about what is this knowledge economy and how will the State should approach it. Until we will have a Knowledge Bank, I propose to talk only about The World Bank and access the money they offer for educational purposes…and of course, mention its point of view in this short article.
The World Bank vision – World Development Report “Knowledge for development”
- The report is significant in that it proposes to look at the problems of the development in a new way – from the perspective of knowledge.
- Movements of the knowledge economy necessitates a rethinking of economic fundamentals because knowledge is different from other goods in that it shares many of the properties of a global public good. This means, among other things, those governments (or anybody else) have to protect intellectual property rights. Moreover, the report signalizes the danger of monopolization that can be even greater for knowledge economies than for industrial economies.
- Types of knowledge:
o Knowledge about technology – technical knowledge or simply know-how such as nutrition, birth control of software engineering
o Knowledge about attributes such as the quality of a product or the diligence of a worker.
o Communicating knowledge involves taking advantage of the new information and communication technology through increase competition, private sector provision and appropriate regulations.
However, World Bank maintains its neoliberal orientation with an emphasis on open trade and privatization. Acquiring knowledge not only involves using and adapting knowledge available elsewhere in the world (through open trading regim, foreign investments, license agreements), but also local knowledge creation through research and building on indigenous knowledge.
Burton Jones view– Knowledge capitalism (1999)
The governments might assist in the transition to the knowledge economy by focusing on knowledge acquisitions (education, learning, skills formation) and knowledge development (research, innovation), policies. He suggest that most of the changes have occurred as a spontaneous response to the demands of the market rather then through state intervention, the State has an important role to play.
Knowledge economy and knowledge society are two distinctive concepts:
- Knowledge economy – “points to the economics of knowledge and information and of education”
- Knowledge society – “points to the concept and the rights of knowledge workers as citizens in the new economy, focusing on the subordination of economic means to social ends.”
So, everyone agrees more or less that the State should not involve in a centralized manner in the knowledge market. However, will this non-involvement guarantees us good results? Nordic countries’ examples would prove the contrary.