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Abstract:
For the last two hundred years, neo-classical economics has recognised only two factorsof production: labour and capital. This is now changing. Information and knowledge arereplacing capital and energy as the primary wealth-creating assets, just as the latter tworeplaced land and labor 200 years ago. In addition, technological developments in the20th century have transformed the majority of wealth-creating work from physically- based to "knowledge-based.” Technology and knowledge are now the key factors of  production. With increased mobility of information and the global work force, knowledgeand expertise can be transported instantaneously around the world, and any advantagegained by one company can be eliminated by competitive improvements overnight. Theonly comparative advantage a company will enjoy will be its process of innovation--combining market and technology know-how with the creative talents of knowledgeworkers to solve a constant stream of competitive problems--and its ability to derivevalue from information. We are now an information society in a knowledge economywhere knowledge management is essential. This page lists and rates Internet resourcesrelated to the field of knowledge based economy and knowledge management in the newinformation society.
KNOWLEDGE BASED ECONOMY(with special reference to India)
“We are living through a period of profound change and transformation of the shape of society and its underlying economic base ... The nature of production, trade, employmentand work in the coming decades will be very different from what it is today.”In an agricultural economy land is the key resource. In an industrial economy naturalresources, such as coal and iron ore, and labour are the main resources. A knowledgeeconomy is one in which knowledge is the key resource. It is not a new idea thatknowledge plays an important role in the economy, nor is it a new fact. All economies,however simple, are based on knowledge about how, for example, to farm, to mine and to build; and this use of knowledge has been increasing since the Industrial Revolution. Butthe degree of incorporation of knowledge and information into economic activity is now
 
so great that it is inducing quite profound structural and qualitative changes in theoperation of the economy and transforming the basis of competitive advantage. The risingknowledge intensity of the world economy and our increasing ability to distribute thatknowledge have increased its value to all participants in the economic system. Theimplications of this are profound, not only for the strategies of firms and for the policiesof government but also for the institutions and systems used to regulate economic behaviour.
What Is Knowledge Economy?
“Capitalism is undergoing an epochal transformation from a mass production systemwhere the principal source of value was human labour to a new era of ‘innovationmediated production’ where the principal component of value creation, productivity andeconomic growth is knowledge.”
Definitions:
Defining the knowledge economy is challenging precisely because the commodity it restson “knowledge” is itself hard to pin down with any precision. Perhaps for this reasonthere are few definitions that go much beyond the general and hardly any that describethe knowledge economy in ways that might allow it to be measured and quantified.# The knowledge economy is a vague term that refers either to an economy of knowledgefocused on the production and management of knowledge, or a knowledge-basedeconomy. In the second meaning, more frequently used, it refers to the use of knowledgeto produce economic benefits.# The knowledge economy is the story of how new technologies have combined withintellectual and knowledge assets - the "intangibles" of research, design, development,creativity, education, brand equity and human capital - to transform our economy.The Knowledge Economy is emerging from two defining forces: the rise in knowledgeintensity of economic activities, and the increasing globalisation of economic affairs.The rise in knowledge intensity is being driven by the combined forces of the informationtechnology revolution and the increasing pace of technological change. Globalisation is being driven by national and international deregulation, and by the IT relatedcommunications revolution.However, it is important to note that the term ‘Knowledge Economy’ refers to the overalleconomic structure that is emerging, not to any one, or combination of these phenomena.Various observers describe today's global economy as one in transition to a "knowledgeeconomy", as an extension of "information society". The transition requires that the rulesand practices that determined success in the industrial economy need rewriting in aninterconnected, globalised economy where knowledge resources such as know-how,
 
expertise, and intellectual property are more critical than other economic resources suchas land, natural resources, or even manpower.According to analysts of the "knowledge economy," these rules need to be rewritten at thelevels of firms and industries in terms of knowledge management and at the level of  public policy as knowledge policy or knowledge-related policy.
Concepts:
A key concept of this sector of economic activity is that knowledge and education (oftenreferred to as "human capital") can be treated as:
• A business product, as educational and innovative intellectual products and servicescan be exported for a high value return.• A productive asset.
The initial foundation for the Knowledge Economy was first introduced in 1966 in a book  by Peter Drucker. The Effective Executive described the difference between the Manualworker and the knowledge worker. A manual worker works with his hands and produces"stuff". A knowledge worker works with his or her head not hands, and produces ideas,knowledge, and information.
Knowledge Economy Vs. Traditional Economy:
It can be argued that the knowledge economy differs from the traditional economy inseveral key respects:• The economics is not of scarcity, but rather of abundance. Unlike most resources thatdeplete when used, information and knowledge can be shared, and actually grow throughapplication.•The effect of location is either diminished, in some economic activities: usingappropriate technology and methods, virtual marketplaces and virtual organizations thatoffer benefits of speed, agility, round the clock operation and global reach can be created. or, on the contrary, reinforced in some other economic fields, by the creation of businessclusters around centres of knowledge, such as universities and research centres havingreached world-wide excellence.• Laws, barriers and taxes are difficult to apply on solely a national basis. Knowledge andinformation "leak" to where demand is highest and the barriers are lowest.
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