Knowledge Economy is the latest term inspiring the every nooks and corner of human society. Although, there is no consensus on the definition of this term, it is usually referred to an economy that focuses on the production and management of knowledge in the frame of economic activities through the use of knowledge technologies. The key resource in Knowledge Economy is knowledge which is the driver of productivity and economic growth (Kogut & Zander, 1992; Nonaka & Takeuchi, 1995; Choo & Bontis, 2002; Zítek & Klímová, 2011). Yet, success depends on the effective use and exploitation of all types of available knowledge in all manner of economic activity. (DTI, 1998).
The Knowledge Economy is different from the traditional economy in several aspects. One of the key aspects is that it considers that the application of knowledge adds more value than the traditional economic factors like capital, raw materials and labour. It is the phenomena which is transforming conventional time and space bounded business world into a boundary less 24/7 business arena offering economic opportunities for those who have the capacity to use available knowledge in innovative ways. As a result, the business world has become deeply innovative and global in nature (Chichilnisky, 1998).
Houghton & Sheehan (2000) have identified the three defining forces behind knowledge economy: (i) the rise in knowledge use in economic activities, (ii) the increasing globalization of economic affairs, (iii) the high pace of technological advancements particularly information & communications technologies. Whereas, Dahlman & Andersson (2000) have identified four key pillars of Knowledge Economy:
– An educated and skilled labor force that continuously upgrades and adapts skills to efficiently create and use knowledge;
– An effective innovation system of firms, research centers, universities, consultants, and other organizations that keeps up with the knowledge revolution, taps into the growing stock of global knowledge, and assimilates and adapts new knowledge to local needs,
– An economic incentive and institutional regime that provides good economic policies and institutions, which promote efficient creation, dissemination, and use of existing knowledge.
– A modern and adequate information infrastructure that facilitates the effective communication, dissemination, and processing of information and knowledge.
The knowledge economy has given a new dimension to the business world. Production is being rationalized globally, with organizations combining the factors, features and skills of various locations in the process of competing in the global market. Most of the organizations with a dominant position no longer belong to just one leading country. They are multinational and transnational. To compete with their rivals successfully organizations must now compete head-to-head in all markets. In this new global competition, competitiveness depends increasingly on the coordination of, and synergy generated between a broad range of specialized industrial, financial, technological, commercial, administrative and cultural skills which can be located anywhere around the world. These challenges compel organizations to become learning organizations; continuously adapting management, organization and skills to accommodate new technologies to grasp new opportunities. Also they need to promote inter-organization and intar-organization linkage to strengthen their system of innovation (Houghton & Sheehan, 2000; Powell & Snellman, 2004; Cooke & Piccaluga, 2006).
Information and Communication technologies (ICT) serve as the technical backbone to the knowledge economy (Henderson, 2000). Yet, Knowledge economy primarily reliance on intellectual capabilities and knowledge-intensive activities which can be offered either as a product or a service (Powell & Snellman). A higher level of knowledge and skills which cultivate creativity, innovation and entrepreneurship are much demanded from individuals and organizations to survive in knowledge economies.
While there is growing agreement on the importance of skills per se as a key engine for economic growth, there is far less agreement on which competencies and skills make the difference. Some of the most agreed upon workplace competencies reported by Houghton & Sheehan (2000) are: Inter-personal skills, team work and the ability to collaborate in pursuit of a common objective, leadership capabilities, intra-personal skills, motivation and attitude, the ability to learn, problem-solving skills, effective communication with colleagues and clients, Analytical skills, ICT skills.
Trent Batson, the Executive Director of The Association for Authentic, Experiential and Evidence-Based Learning has listed following 12 important skills required in today’s knowledge economy:.
- Being an innovator in thought and action
- Thinking like an entrepreneur
- Communicating in writing in all mediums and forms with varying groups of people and a wide range of purposes
- Communicating via speaking in all the mediums available to us today: telephones, Skype, conferencing systems, and even in face-to-face meetings or conferences or hallway conversations
- Finding the right Web 2.0 tools to enable or improve a particular business need, understand the business model of the provider of the tools, and assess the cost and benefits including maintaining the Web site associated with the tools over time
- Working cooperatively across distances in ways that benefit all
- Identifying a core service, staying with it, and resisting the abundance of opportunities and side paths in this highly fluid knowledge economy
- On the other hand, maintaining a reflective and integrative approach to new trends, new ideas, and new opportunities from anywhere in the world–what fits and what doesn’t fit with the core service?
- Being able to research quickly and find what is useful within minutes, not hours or days. Knowing enough about many disciplines so you can settle on search terms to find the rights kinds of knowledge for your purpose
- Staying nimble and ready to re-think all that you do
- Staying attuned to our culture
- Being as literate in Web 2.0 as in reading books
Formal education, lifelong learning and fundamental research are central to economic progress in the new economy. At the same time, growth in the knowledge economy is founded on discovery and innovation, in which the research carried out in educational institutions, has a central role. As a result, educational institutions are considered as the key driver of knowledge economy. This role demands a paradigm shift in the mindset of educationists, students, policy makers, and other stakeholders to equip students with appropriate knowledge and skills of knowledge economy. On the contrary, too often students walk out of educational institutions without having clear understanding of the knowledge economy’s challenges. Many of them are confused with the terms like “Global economy”, “flat world”, “knowledge economy”, and “21st Century Skills”, ‘information society’ (Giddens, 1994), the ‘learning society’ (Commission of the European Communities, 1996), the ‘network society’ (Castells, 1998), the ‘learning economy’ (Field, 2000; Lundvall & Borás, 1997), and ‘economies of expertise’ (Venkatraman and Subramaniam, 2002), etc. Consequently, they often fail to meet the challenges of the employment market. It is an undeniable responsibility of educational institutions to eradicate students’ intellectual ambiguities about these terms and prepare them to face the challenges of knowledge economy.
The knowledge economy generates a strong demand for university graduates because of the very nature of scholarly activity in a university. According a latest report, by 2018, the economy will create 46.8 million new jobs. Nearly two-thirds of these will require workers with at least some college education, with a slight majority requiring workers with a Bachelor’s degree or better. Therefore, students have to be trained to work in today’s technology driven, knowledge intensive, complex work place. It will require to motivate students to learn multiple skills related to science, math, technology, and engineering. Mastery in communication, soft skill, standardized professional practices, and social engineering are some other areas which ensure students’ success in the knowledge economy. At the same time, students must be trained to quickly acquiring globally available knowledge.
As a matter of fact, whether prepared or not, no nation can afford to ‘delink’ from global information connectivity and the knowledge economy. Countries like Pakistan have to take serious measures to convert conventional educational institutions into as the key driver of knowledge economy. It may require multi-dimensional measures including changing mindset of policy makers and other stake holders, restructuring of the national ICT infrastructure, and most importantly inspiring students to learn multiple skills required in the knowledge economy.
Inspiration usually comes from seeing people working in professional world. Generally, students see their teachers as their role models. Therefore, it is equally important that teachers should be equipped with the knowledge and skills which are required to understand the challenges and opportunities of knowledge economy. On the contrary, there are serious concerns about the capacity of teachers. Academic institutions have to prepare teacher training programs to upgrade teachers’ knowledge and skills related to the knowledge economy. These training must focus on: (i) increasing educational opportunities to learn appropriate skills for knowledge economy; (ii) changing the mindset of teachers towards technologically based global entrepreneurial competition; and (ii) to upgrade the core KE skills base of teachers to improve their pedagogical skills.