Knowledge Economy and Its Implications for Work

Knowledge economy is an economy in which growth is dependent on the quantity, quality, and accessibility of the information available, rather than the means of production. The term “knowledge-based economy” results from a fuller recognition of the role of knowledge and technology in economic growth. Knowledge, as embodied in human beings (as “human capital”) and in technology, has always been central to economic development. But only over the last few years has its relative importance been recognized, just as that importance is growing. Knowledge-intensive service sectors, such as education, communications and information, are growing even faster. Indeed, it is estimated that more than 50 per cent of Gross Domestic Product (GDP) in the major OECD economies is now knowledge-based.
It can be argued that the knowledge economy differs from the traditional economy in several key respects:
The economics are not of scarcity, but rather of abundance. The effect of location is either diminished, in some economic activities by creating virtual environment that works round the clock with a global reach. Laws, barriers, taxes and ways to measure are difficult to apply solely on a national basis. Knowledge and information “leak” to where demand is highest and the barriers are lowest. Knowledge enhanced products or services can command price premiums over comparable products with low embedded knowledge or knowledge intensity. Pricing and