You would agree with us that the shift to a knowledge-based economy is occurring far too quickly. This means that we are working and conducting business in ways that were unimaginable only a few decades ago. Even more so than capital and equipment, information and knowledge assets are becoming increasingly important to productivity.
To state the obvious, utilizing the knowledge of society is essential for economic success, as is assisting both the public and private sectors in adapting to the changing business environment. It is here that knowledge management (KM) helps in this situation. Development professionals may make a smoother and quicker shift to the knowledge economy by utilizing the tools that KM can provide.
Before we go into the specifics, let us assume that you might be wondering what all the fuss is about KM. For us, knowledge management (KM) refers to a collection of methods and tools for identifying and leveraging information and knowledge assets, particularly tacit knowledge, to enhance internal and external communication and processes.
In recent years, there has been an increasing interest in how technologies are used both to increase internal knowledge sharing within a business and the development community as well as to capture and communicate tacit information outside. That is why nowadays a lot of businesses emphasize innovation and ongoing development, as well as the value of their personnel as knowledge and information resources.
Perhaps we should also emphasize that knowing the value of tacit knowledge is essential to understanding how KM works and why it is so important for economic development. However, a major problem has been academic excellence is not the only determinant of success in the information era. In the present world, applying knowledge and information is just as crucial as creating it. From these points, one may conclude that it is essential to be able to utilize all employees' knowledge and information, not just the "knowledge/information champions," quickly. This is how knowledge economies are developed.
First thing first: what is a knowledge economy?
Simply put, a knowledge economy is an economy where knowledge is the key asset. Where organizations and people acquire, create, disseminate, and use knowledge more effectively for greater economic and social development.
According to the Organization for Economic Co-operation and Development (OECD), a “knowledge-based economy” is an expression coined to describe trends in advanced economies towards greater dependence on knowledge, information, and high skill levels, and the increasing need for ready access to all of these by the business and public sectors.
Each country should pay utmost importance to ensure the four key pillars of the knowledge economy are nurtured, continuously revised, updated, and most importantly unconditionally supported if they want to be considered a knowledge-based economy country. Let us zoom into the four pillars of a knowledge economy as described by the World Bank.
- Education & Training – Countries need well-educated, well-trained, and highly-skilled people to generate, distribute, and use information and knowledge.
- Information Infrastructure – Proper information infrastructure is required for an efficient and effective flow of information, communication, and outreach.
- Economic Incentive & Institutional Regime – The knowledge economy depends on effective policies and economic environment that promotes entrepreneurship, stimulates investment in information and communications technology (ICT), and permits the free flow of knowledge.
- Innovation Systems – In order to ensure that knowledge and knowhow are transferred and used, an adequate network of various stakeholders from the academia, think tanks, the private sector, NGOs, and so on, needs to be in place to facilitate discussions, produce new knowledge, and adapt the acquired one to the local context.
For practical benefits of using knowledge, any country must create proper policies, institutions, investments, and coordination across the four pillars mentioned above. Additionally, it indicates that governments must place a higher priority on high-quality education, demand-driven curricula, and lifelong learning in general while considering long-term labor market demands and comprehensive on-the-job training.
This means that the knowledge economy is characterized by developing the knowledge, skills, attitudes, and values that countries rely on. The aim is to foster social cohesiveness and educate individuals to become and remain effective workers and engaged citizens. For this, advanced information infrastructure, innovation, research, and quick technological change are the main drivers of the knowledge economy. Thus, the vast majority of workers in the knowledge economy possess advanced computer skills and knowledge.
Another practical implication is for businesses. This means that a company's ability to establish and retain a competitive advantage in the modern economy depends more and more on its capability to quickly adjust to a constantly changing environment. This happens, for example, through the innovation of systems and processes and by adhering to broad knowledge-based economic trends.
Yet, it is easier said than done. What is not yet clear is addressing questions such as: How simple is it to spot the trends that characterize the environment in which businesses must operate? What are the benefits and drawbacks of businesses making the switch to a "knowledge-based economy"?
The ability of businesses to adapt processes and products to new information will become increasingly crucial to maintaining a competitive advantage. Tacit knowledge, on the other hand, is often ingrained in people and organizations and is challenging to transfer. It is intuitive information and know-how that is based on our experience, practice, and beliefs. Do we have regional or global knowledge centers similar to how we have them for exporting goods and products? What are the individual duties of the key players in the emerging global or regional knowledge economy? What characteristics characterize the new knowledge workers?
All of these issues, as well as many others, must be seriously considered when countries, particularly developing ones, plan their economic and social development. Addressing the questions helps in providing efficient and effective ways of catering services, developing products, and creating policies that will rely on fluid information flow, knowledge exchange, and regional and/or global collaboration as the knowledge revolution is resulting in greater globalization and increased international competition.
This is what we plan to do: the case of RECONOMY
RECONOMY is a regional program of the Swedish International Development Cooperation Agency (Sida) and Helvetas. The program has been facilitating the sharing of experiences, ideas, and discussions on innovative ways for private sector growth as well as various supporting functions. The aim is to enable the target groups – women and young people and those from disadvantaged groups – to attend demand-driven training and to obtain the knowledge and skills they need to be employed or self-employed.
With a focus on regional economic development, meaningful dialogues, exchanges, and collaboration among public and private actors, we would like to take advantage of these exchanges in the future and use the lessons learned to support additional exchanges and the generation of evidence. We intend to ensure impacts on the regions and the regional economic systems. RECONOMY will be essential in providing quality control and a sufficient, well-structured, and long-lasting transfer of knowledge and expertise.
RECONOMY seeks to help bring about two major improvements. The program facilitates information/knowledge flow for changes or improvements in practices among market actors. This may happen because of regional knowledge and learning networks sharing, informing, and stimulating exchanges and learning.
In addition, the program anticipates that functional networks will facilitate partners' and stakeholders' understanding and application of facilitative approaches. For this, it is essential to create or leverage existing platforms for the community of practitioners of systems approach to support the program's many activities through knowledge and learning networks.