Knowledge-based economy

Knowledge-based economy

Over the recent years knowledge has become an important focus of economic growth and the gradual increase of the welfare of society, but what is it? And what builds an economy based on knowledge? A knowledge-based economy is that economy that invests in human and social capital. In other words, it is the economy that fosters the ability to invent and innovate in order to generate new knowledge and promote ideas into products, processes and organizations capable of promoting development and, create wealth and solve economic difficulties of the society. The generation and exploitation of knowledge within an economy, creates economic growth and social welfare.

The economy, based on knowledge, is based on the following points:

Economic performance comprising the ability of a region or a country to generate wealth which is a necessary condition for knowledge and development of any economy

The institutional framework and outward orientation which refers to aspects essential for any economy and the rule of law, openness to trade with the outside world and ability to attract investment from other latitudes.

The dynamic innovation system consisting of information flows and relationships between industry, government, universities and research centers and development of science and technology in the existence of excellent researchers, knowledge production, and a patent system linking innovations with commercial application.

Education and skilled human resources as education provides the opportunity for people to acquire skills that can be applied in productive activities that facilitate interaction, and communication between people.

The infrastructure of information technology and communications refers to the access to technologies like telephone, computers and the Internet.

The above points show that the economy is based on knowledge and is the necessary foundation to be productive and competitive. To measure this, the World Bank uses indexes KEI (Knowledge Economic Index) and KI (Knowledge Index), which measures the ability of ...