Knowledge-based Economy
The knowledge economy addresses how education and knowledge—that is, "human capital," can serve as a productive asset or business product to be sold and exported to yield profits for individuals, businesses, and the economy. This component of the economy relies greatly on intellectual capabilities instead of natural resources or physical contributions. In the knowledge economy, products, and services that are based on intellectual expertise advance technical and scientific fields, encouraging innovation in the economy as a whole.
The World Bank defines knowledge economies according to four pillars:
- Institutional structures that provide incentives for entrepreneurship and the use of knowledge
- Availability of skilled labour and a good education system
- Access to information and communication technology (ICT) infrastructures
- A vibrant innovation landscape that includes academia, the private sector, and civil society.
Real-World Example of a Knowledge-Economy
Academic institutions, companies engaging in research and development (R&D), programmers developing new software and search engines for data, and health workers using digital data to improve treatments are all components of a knowledge economy. These economy brokers pass on their knowledge and services to workers in more traditional fields, such as farmers who use software applications and digital solutions to manage their farm crops better, advanced technological-based medical care procedures such as robot-assistant surgeries, or schools that provide digital study aids and online courses for students.
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