Education and the
Knowledge Economy
What is a knowledge economy? If
other sectors of the economy are composed of agriculture, a so called primary
sector, manufacturing, a secondary sector, and services industry as a terciary
sector, the knowledge economy bases itself in education and human capital. We
are talking about big investments in education, creation of knowledge and
research institutions that makes it possible for the country to raise the
standard of living in the long term. Examples are Israel, which moved from
production of oranges and kiwis to high-tech products such as Google’s
autosuggest; Korea which now produces well-known brands like Samsung and
Hyundai; costa Rica, which is home to Intel’s semi-conductor industry.
Now what is needed to produce
such transformation? 1. Large scale systems in the country’s education 2.
Investment in research institutions 3. Private sector should closely cooperate
with universities, so that professors work in the areas that have economy
potential making it more likely that discoveries can be transformable into
marketable products and lead to economic growth. History shows that this
transformation can take from 20 to 30 years. However, some stages of
development can be skipped shortening the process. However, the key is to
invest in education to make this happen.
A Knowledge based economy is an
economy of knowledge focused on the production and management of knowledge. It
requires individuals to have adaptive and creative thinking to develop
solutions to societies problems. It is an open source economy of ideas that
invent the future state for a better more sustainable world.
According to Peter Drucker, Knowledge
workers are workers whose main capital is knowledge.
Typical examples may include software engineers, physicians, pharmacists, architects,engineers, scientists,
public accountants, lawyers,
and academics,
whose job is to "think for a living". When I think about
professionals, I think about doctors. Would you not prefer to have the best
doctor available in town and be done with your health issues right away,
instead of paying a cheap doctor and having to go into additional treatment of
never resolving the problem in the first place? It seems logical, but it does
not seem to apply for any branch. In the business branch, many would go for the
cheapest.
Knowledge-focus as the third wave
of human socio-economic development. The first wave was the Agricultural Age
with wealth defined as ownership of land. In the second wave, the Industrial
Age, wealth was based on ownership of Capital, i.e. factories. In the Knowledge
Age, wealth is based upon the ownership of knowledge and the ability to use that
knowledge to create or improve goods and services. Product improvements include
cost, durability, suitability, timeliness of delivery, and security. Using
data in the Knowledge Age, 2% of the working population will work on the
land, 10% will work in Industry and the rest will be knowledge workers.
In a knowledge based economy,
customers pay for knowledge. What do you know that others don’t? Consider the
article “5 Major Ways Freelancer will change the economy by 2040”. As the
economy turns towards a knowledge economy, there will be many changes in the
job market. 1. A career will consist of many short-term assignments, as opposed
to 30 years in the same company. 2. The rise of platforms to manage everything
from you daily life, to job searching, child care, training and education
programs, etc. 3. Talent agencies will blossom to direct people’s careers. 4.
The growth of small businesses will boost wages 5. The individual will be
responsible for their own success.
Reality is changing at a rapid
pace than ever. From a period of Industrialization, where Capital was the Key,
to knowledge. Under industrialization, you needed an office, a factory, a
physical place to produce. In the world of today, you don’t need a heavy
investment to start a company. You can start if from home, and then expand to
an office when you already have a flowing stream of income. This apparently is
not fully understood by most. When they have a good idea for a product, most
entrepreneurs rent office space without testing the market. The concept of
virtuality is not something people grasp. The knowledge economy involves
acquiring a unique knowledge, and then selling it as a service.
Specialization is important, but
a solid educational background is more. By having a strong university education,
it is easy to deepen and navigate different areas within your field. Whereas in
the past information was restricted, now it is too abundant. This is a major
change of paradigm. Before, information was only available in the form of
books, which very sometimes hard to get hold of. I am not speaking of 100 years
ago, I am saying 15 years ago. For example, in Argentina, books in English were
only available in specialized stores. Now, you can have almost any book
delivered home by using services like amazon. The same with products: cheap and
high quality merchandise can be bought at E-bay with minimal transportation
cost. This is of course generating much more business for some, but also
cutting the middle man (and his commission). Having global reach is also very
easy. Were as before books were aimed at a local market, launching a digital
book and going global is a piece of cake (the book you are reading now is a
good example of this). This means that you can now have global reach from the
comfort of your home. This works out perfectly for people who live in low-cost
countries, who can very easily make the same salary or more than they would in
a regular job by working online.
Youtube, Netflix and related
video channels are also a game changer. Consider that today you don’t need a TV
to keep yourself informed. You can navigate through movies, TV series or
documentaries from all imaginable subjects whenever you want. You can also have
immediate access to information with specialists in your field. And you can
also specialize in a field and post your own videos, blogs, comments,
publications… Freedom of expression is as strong as ever. This works very well
for developing nations, who will find it very easy (and cheap) to catch up. It
does not work so well for developed nations though, who might find that the
picture of the world they were sold (a Cold War picture, based on political
interests), is not really so close to reality as they thought. The age of
knowledge also means that a lot of information that was before hidden by
governments is finally coming out. Like the fact that the Latinamerican region
was restrained in it’s development due to the fact that it was a victim of the
“Cold War”, a fact very little known in developed nations.
Huge changes await us in the near
future, where they will be a re-alignment of world power. It is very difficult
to say which countries will position themselves higher, or will be the most
favoured by this changes. It is clear that there will be winners and losers. But
whatever happens, it is clear to me that being highly educated will be more and
more important, and valued by the market. Whereas before you had to work for a
company, you will now be able to acquire, package and sell the most expensive
commodity of all: knowledge. A new era of awakening is here, the age of
philosophers is back. And a better more developed and inclusive world for ALL.
Sources
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