How Do Knowledge Economies Work: A Short Answer

If you had to develop public policies for knowledge economies you would want to understand how they work. It is safe to say that knowledge, innovation, and creativity stand on a foundation of social, cultural, and economic factors. Because of this knowledge-related policy should provide social, cultural, and economic benefits. In particular, it is communication that forms the fabric and superstructure of innovation and knowledge-based economies and societies.

Flows creation and diffusion of knowledge are, quite simply, the flows of ideas through communication. In this respect it is accurate to say that knowledge economies and societies are communication economies and societies. It is therefore helpful to understand the communication view of knowledge economies by thinking of knowledge as simply sets of meaningful and actionable ideas. If one asks what happens to ideas in social and economic life thoughts will quickly turn to communication. Communication is the exchange of ideas, and ideas have little worth if they are not active in social exchange. It is through communication processes that (1) ideas are diffused, absorbed, and refined to have socially and economically valuable meanings; (2) that particular problems or questions are agreed to exist and to be in need of attention; (3) that particular groups decide how best to resolve questions and problems; and (4) that otherwise disparate ideas can be re-organised into socially and economically meaningful and creative sets of ideas to solve new problems.

People in social and economic contexts are the platforms on which knowledge economies are built. Therefore knowledge is, at base-level, linked to language, social structure and process, and culture. All knowledge-related policy, including innovation policy, should be cognisant of these fundamental issues, and should respond decisively and intelligently to them. A central innovation policy question should therefore be about what basic social and cultural (including communication) conditions are required for national innovation systems to be both economically competitive and socially enriching. Innovation and knowledge systems are misrepresented when portrayed as being simply science-, engineering-, or technology-based. Science, engineering, and technology are best seen as some of the expressions of innovation systems rather than their drivers.

Knowledge-related public policy must begin with consideration of the social architecture and cultural frameworks that are needed for knowledge to flourish without alienating the less fortunate, without creating autocratic intellectual elites, and by making life (not just economies) richer and more sustainable, and citizens more engaged and wiser.

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