Which is the largest retailer without any outlets or inventory holding? The answer is Amazon. In the similar manner, literally without having any passenger cars, Uber is the largest taxi cab service provider in the World. Alibaba is the largest business to business trade platform without having any business centres. The knowledge economy is changing the entire idea of running a business in the contemporary economy. Building a knowledge based economy
Communication is increasingly being seen as fundamental to knowledge flow. Social structures,
cultural context and other factors influencing social relations are therefore of fundamental importance to knowledge based economies
Masihul Huq Chowdhury
Which is the largest retailer without any outlets or inventory holding? The answer is Amazon. In the similar manner, literally without having any passenger cars, Uber is the largest taxi cab service provider in the World. Alibaba is the largest business to business trade platform without having any business centres. The knowledge economy is changing the entire idea of running a business in the contemporary economy.
As Benjamin Franklin once said An investment in knowledge pays the best interest, it is more so realistic and relevant in the present context of World Economy or even in Global Influence. The knowledge economy is the use of knowledge to generate tangible and intangible values. Technology and in particular knowledge technology help to transform a part of human knowledge to machines. This knowledge can be used by decision support systems in various fields and generate economic value. Knowledge economy is also possible without technology. Peter Drucker, the management guru popularised this term in his 1969 book The Age of Discontinuity. Other than the agricultural-intensive economies and labor-intensive economies, the global economy is in transition to a knowledge economy, as an extension of an in the Information Age led by innovation. The transition requires that the rules and practices that determined success in the industrial economy need rewriting in an interconnected, globalised economy where knowledge resources such as trade secrets and expertise are as critical as other economic resources. With earths depleting natural resources, the need for green infrastructure, a logistics industry forced into just in time deliveries, growing global demand, regulatory policy governed by performance results, and a host of other items high priority is put on knowledge; and research becomes paramount. Knowledge provides the technical expertise, problem-solving, performance measurement and evaluation, and data management needed for the transboundary, interdisciplinary global scale of todays competition. Worldwide examples of the knowledge economy taking place among many others include: Silicon Valley in California; aerospace and automotive engineering in Munich, Germany; biotechnology in Hyderabad, India; electronics and digital media in Seoul, South Korea; petrochemical and energy industry in Brazil. Many other cities and regions try to follow a knowledge-driven development paradigm and increase their knowledge base by investing in higher education and research institutions in order to attract high skilled labour and better position themselves in the global competition.
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. Unlike most resources that are depleted when used, information and innovation are actually grow through application. Reshaping of economic activities: using appropriate technology and methods, virtual market places and virtual organic stations offer benefits of speed, agility, round the clock operation and global reach can be created. 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. Knowledge when locked into systems or processes has higher inherent value than when it can walk out of the door in peoples heads. Competencies in the human resource capital is a key component of value in a knowledge-based company, yet few companies report competency levels in annual reports. In contrast, downsizing is often seen as a positive cost cutting measure. Communication is increasingly being seen as fundamental to knowledge flows. Social structures, cultural context and other factors influencing social relations are therefore of fundamental importance to knowledge economies. These characteristics require new ideas and approaches from policy makers, managers and knowledge workers.The neoclassical economists have emphasised on labour and capital to be key factors of development. To Paul Romer knowledge is the third factor of production and long- term growth it is the basic form of capital and that economic growth is driven by its accumulation.
The overall features of knowledge economy can be summed up as follows:
i. In knowledge economy knowledge is a public good, as this becomes object of wide use.
ii. As the knowledge economy is dependent on generation of knowledge for its prosperity here knowledge gained by experience is as important as formal education and training.
iii. A knowledge economy is to become a learning economy in order to utilise its full capacity and to take its optimum advantage. Learning means not only using new technologies to access global knowledge, but also to using them to communicate with others about innovation. In the learning economy individuals, firms and countries will be able to create wealth in proportion to their capacity to learn and share innovation. Formal education, too, needs to become less about passing on information and focus more on leading people how to learn. Learning thus becomes a life-long process in knowledge economy.
iv. According to OECD, ICTs are the facilitators of knowledge creation. In the knowledge economy ICTs are the tools for releasing the creative potential and knowledge embodied in people. Wealth generation is becoming more closely tied to the capacity to add value using ICT products and services.
When Singapore was expelled from Malaysia in 1965 and thrust into an unwanted independence, it was a typical Third World country. Its per capita income of USD 500 was the same as Ghana then. It was not desperately poor, but it had malnutrition. I know this personally as I was put on a special feeding program when I joined school in the first grade, drinking milk from a pail with a ladle shared by other children.This malnutrition disappeared quickly. Singapores per capita income has gone up from USD 500 to USD 55,000 plus today, the largest increase any newly independent nation has enjoyed. This spectacular economic success story of Singapore is clearly amazing. Yet, when I was Singapores ambassador to the UN in the 1980s, the then head of UNICEF, the American James Grant, used to chide me for speaking about it.The babies who lived in Singapore went on to enjoy one of the best education systems in the world. The OECD ranked 15-year-old Singaporean children number one in the world in a recent global ranking of Universal Basic Skills in mathematics and science. Singapore students also topped the OECD PISA problem solving test in 2012. So why did Singapore succeed so comprehensively? The simple answer is exceptional leadership. Many in the world have heard of Mr. Lee Kuan Yew, the founding prime minister and his team. This exceptional team also implemented three exceptional policies: Meritocracy, Pragmatism and Honesty. Indeed, I share this secret MPH formula with every foreign student at the Lee Kuan Yew School, and I assure them that if they implement it, their country will succeed as well as Singapore. Meritocracy means a country picks its best citizens, not the relatives of the ruling class, to run a country. Pragmatism means that a country does not try to reinvent the wheel. As Dr. Goh Keng Swee would say to me, Kishore, no matter what problem Singapore encounters, somebody, somewhere, has solved it. Let us copy the solution and adapt it to Singapore. Copying best practices is something any country can do. However, implementing Honesty is the hardest thing to do. Corruption is the single biggest reason why most Third World countries have failed. The greatest strength of Singapores founding fathers was that they were ruthlessly honest. It also helped that they were exceptionally shrewd and cunning.
Bangladesh needs to take lessons from Singapore and invest in the education sector from Primary level to University level. The education system needs a relook. The Secondary School Certificate is the first public examination. Rather than looking at how many passed with GPA Golden 5, there should be an effective mechanism to test the competence of the students and relocate them to the areas of their specific strengths. From Higher Secondary School to under/post graduate level, the emphasis rather should be honing the skills of the students as found during SSC level examination. The teaching methodology also need realignment and modernisation to adopt these changes. The vision of the digital Bangladesh will rather get the fruit once we can properly implement these.
A detailed strategy paper with the partnership of the leading universities of the world and academia needs to be developed along with effective tools to monitor, tracking can be instituted. There are pocket of excellence but the base should rather be broadened. With one of the largest young population, if we can effectively adopt required strategy, the country can alleviate from a low middle income to developed economy in not that distant future. Let the journey begin today.
The writer, a banker by profession, has worked both in local and overseas market with various foreign and local banks in different positions
