Business, Legal & Accounting Glossary
A knowledge-based economy is one that relies on information and intellectual power as opposed to labour and physical production.
A Knowledge-based economy is an economy established on producing, appraising, and dealing of knowledge. In a knowledge-based economy, orthodox economic concepts like economies of scale and scarcity of resources do not apply. Labour costs also noticeably decrease.
Knowledge is regarded as a tool in a knowledge-based economy. Knowledge resources like expertise are considered as critical as other economic resources like land, capital, and labour. The combination of knowledge and capital is adverted as ‘human capital’. Human capital is a productive asset and is a business product. Knowledge as a business product can be profitably sold in a country and may also be exported to other countries.
Economist Joseph E. Stiglitz wrote, “We live in a knowledge economy, an information economy, an innovation economy“, in reference to the US.
A knowledge-based economy is distinctive from a conventional economy in certain important parameters. The knowledge economy is an economy of excess; not of scarcity. Knowledge does not deplete through use; it only gets increased when it is applied. The economic effect of locational advantage (or disadvantage) is negated in a knowledge economy. Modern technology can be utilized in the creation of virtual organizations and marketplaces. Products enhanced with knowledge also command a higher price than comparable low knowledge embedded devices.
Acquired knowledge is knowledge received from resources that are extraneous to an organization. Acquired knowledge can be bought or leased.
Common knowledge is a category of knowledge that is admitted to be authentic without any verification or investigation of the information given.
It is a type of knowledge brought about by formal structured teaching processes. Directed knowledge can concern a specific subject, topic or skill. Directed knowledge is imparted through textbooks and lectures.
Explicit knowledge is a kind of formulated knowledge that is conveyed and memorialized in the form of numbers, words, scientific and mathematical formulae, and codes. Musical notations is also a type of explicit knowledge. This category of knowledge can be stored without any difficulty. Explicit knowledge is available on the Internet, books and other visual and oral means.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Knowledge-Based Economy are sourced/syndicated and enhanced from:
This glossary post was last updated: 29th March, 2020 | 0 Views.