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Slide 1: JAIST - Japan Advanced Institute of Science and Technology Graduate School of Knowledge Science The Knowledge Economy and the Knowledge Society K 612 Next-Generation Knowledge Management Prof. Katsuhiro Umemoto Ver 1.13 – 2006-10-15

Slide 2: Have you ever thought about it? What is the knowledge economy?  What is the knowledge society?  Why should we care about them?  2 The knowledge economy and society - Andre Saito

Slide 3: Knowledge economy Proposed definition  Economic properties of knowledge  New economic dynamics 

Slide 4: Economy is about… … production, distribution and consumption  of goods and services … markets and firms (in the case of capitalism)  … efficient allocation of resources  Land (raw materials, natural resources)  Labor (workers’ time and effort, expertise)  Capital (equipments, plants, wealth, etc.)  4 The knowledge economy and society - Andre Saito

Slide 5: What is the knowledge economy? Capital Labor Knowledge Agricultural age Industrial age Knowledge age Land Knowledge has become the main resource  The pace of innovation is accelerating  (not only in products and services, but also in processes, markets, sourcing, business models, etc.) 5 The knowledge economy and society - Andre Saito

Slide 6: Growth of K in the economy C Knowledge industries Lb K Knowledge itself is the product/service (e.g., software, media, entertainment, consulting) Ld Pace of change C Knowledge-intensive industries Lb K High level of K embedded in products/services (e.g., electronics, computer, pharmaceutical) Ld C Traditional industries Lb K Capital and labor still largely relevant (e.g., oil & gas, construction, transportation, retail) Ld 6 The knowledge economy and society - Andre Saito

Slide 7: Knowledge has different properties Low rivalry (usually said non-rivalry)  Use by one person does not diminish it Low excludability (usually said partial excludability)  It is difficult to prevent others from using it Knowledge is both input and output  Today’s innovations feed tomorrow’s In other words… Knowledge is an infinite resource  Knowledge tends to spread  7 The knowledge economy and society - Andre Saito

Slide 8: The dynamics of K industries Knowledge has positive externalities: Spillovers (one person’s investment benefits others)  Investment in research/education benefits many  Increasing returns (positive feedback)  In costs: high upfront costs, low marginal costs  In supply: the more you know, the easier to acquire  In utilization: the more you use, the easier to use  In demand: the more you sell, the easier to sell  Network externalities (adopters   value )  8 The knowledge economy and society - Andre Saito

Slide 9: Summary Economic value comes mainly from knowledge  The pace of innovation accelerates  The economy evolves at different paces, with  different levels of knowledge intensity Knowledge has different properties  Low rivalry and excludability: tends to a public good  Multiplicative effect: “shoulders of giants” effect  A new competitive dynamics, with new rules  Increasing returns  9 The knowledge economy and society - Andre Saito

Slide 10: Knowledge society Alternative views  Network-based knowledge society  New social dynamics  Ethical challenges 

Slide 11: Society is about… … social relations (social interactions regulated by  social norms, involving social positions and social roles) … culture (patterns of social practice, norms of  behavior, value systems, traditions, beliefs, etc.) … institutions (social structures and mechanisms of  social order and cooperation) E.g., family, government, media, money, property, labor, etc. Analysis of the K society is more complex! 11 The knowledge economy and society - Andre Saito

Slide 12: Alternative views on the K society Primacy of scientific knowledge (Bell 1973; Stehr 1994)  K as source of authority and basis of social stratification  Scientific research as the ultimate source of knowledge  Rise of knowledge work (Drucker 1969; Reich 1991)  Fastest growing section of the workforce  Knowledge workers own their knowledge  Networked society (Castells 2000; Benkler 2006)  Networked economy, work and social relations  Enabled by information and communication technology  12 The knowledge economy and society - Andre Saito

Slide 13: A network-view of the K society Two basic conditions  Society’s material needs are fulfilled, so there is  greater space for non-market behavior Tools for knowledge creation, utilization and sharing  become widely available Knowledge production, distribution and  consumption becomes decentralized Exponential growth in knowledge availability  Growth and expansion of social networks  13 The knowledge economy and society - Andre Saito

Slide 14: Networked dynamics Open culture  Content is made publicly available  (e.g., the whole Web, creative commons, WiFi) The Blogosphere and social networking  Persistent, distributed, open conversation  Leads to unmediated communication,  collective thinking and social mobilization Peer production  Radically decentralized cooperative production  (e.g., GNU/Linux, Wikipedia, Slashdot, Everquest) 14 The knowledge economy and society - Andre Saito

Slide 15: The ugly side… The network can be used for both good and bad Questionable content  Worthless (e.g., spam, ads, porn)  Strongly biased (e.g., propaganda, prejudice)  About unethical procedures (e.g., hacking, terror)  Questionable actions  Identity cheating, spyware, etc.  Bullying, defaming, etc.  Crime (e.g., phishing, hacking, theft, etc.)  15 The knowledge economy and society - Andre Saito

Slide 16: Summary Three perspectives on the knowledge society  Primacy of scientific knowledge  Rise of knowledge work  Networked society  Networked-view of the knowledge society  Decentralization of knowledge production, distribution  and consumption More open, democratic social relations  Non-market behavior becomes salient  Conflict along the transition is expected  16 The knowledge economy and society - Andre Saito

Slide 17: Implications Levels of analysis: Societal  Organizational  Individual 

Slide 18: Societal level Development of public policies on: Scientific and technological research  Industrial development (K-intensive industries)  ICT infrastructure (access rights, digital inclusion)  Intellectual property (patents, copyright, commons)  Education (knowledge work and citizenship)  18 The knowledge economy and society - Andre Saito

Slide 19: Organizational level External issues  Scan the environment (e.g., public policies, S&T  development, competitors’ behavior, etc. Improve knowledge creation and transfer through  collaborative arrangements and acquisitions Open channels with customers and society  Internal issues  Develop absorptive and innovative capacity  Manage knowledge work and workers  Explore contracting and outsourcing alternatives  19 The knowledge economy and society - Andre Saito

Slide 20: Individual level Learn continuously (knowledge  value)  Formal and informal education  Challenging assignments  Manage own career (value  reputation)  Market oneself and manage opportunities  Cultivate professional and personal networks  Engage in knowledge networks  Develop ethical sense  20 The knowledge economy and society - Andre Saito

Slide 21: Summary Knowledge economy and knowledge society  follow distinct paths of analysis Both have been extensively discussed,  but there is much ground for work Both bring about important practical implications  at societal, organizational and individual levels 21 The knowledge economy and society - Andre Saito

Slide 22: Types of knowledge work Groups Integration Collaboration • Systematic work • Improvisational work Level of interdependence • Methodologies and • Deep expertise across standards functions • Integration across • Fluid deployment of functional boundaries flexible teams Expert Transaction • Judgment-oriented work • Routine work • Individual expertise and • Rules and procedures experience • Low-discretion • Star performance workforce or information Individuals Routine Judgment Complexity of work Source: Adapted from Davenport (2005), Thinking for a Living

Slide 23: An emerging relationship through blogs Andrea accesses past entries from Lilia’s blog Lilia posts answers to Andrea in her own blog A new surge in reciprocal posts and comments after some time Direct exchanges Source: Adapted from Efimova, Lilia through email and (October 03, 2006), Artefacts of a weblog-mediated relationship: a skype visualisation, retrieved 2006-10-11 <http://blog.mathemagenic.com/ 2006/10/03.html#a1839>

Slide 24: Protecting the commons Three layers in the commons infrastructure Informational Creative commons (content) Logical Open software (software) Physical Network neutrality (network) Forms of control Potential responses Source: Inspired by Benkler (2006), Wealth of Networks