The document discusses the knowledge economy and knowledge society. It defines the knowledge economy as one where knowledge has become the main resource and the pace of innovation is accelerating. Knowledge has different properties than traditional resources like being non-rivalrous and partially excludable. The knowledge society can be viewed through the rise of knowledge work or as a networked society where knowledge production and sharing are decentralized through digital networks. There are implications for policies, organizations, and individuals in adapting to these new knowledge-driven environments.

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

2. Have you ever thought about it? What is the knowledge economy? What is the knowledge society? Why should we care about them?

3. Knowledge economy Proposed definition Economic properties of knowledge New economic dynamics

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.)

5. What is the knowledge economy? 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.)

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

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

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  )

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

10. Knowledge society Alternative views Network-based knowledge society New social dynamics Ethical challenges

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!

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

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

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)

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.)

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

17. Implications Levels of analysis: Societal Organizational Individual

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)

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

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

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

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

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 through email and skype Source : Adapted from Efimova, Lilia (October 03, 2006), Artefacts of a weblog-mediated relationship: a visualisation , retrieved 2006-10-11 <http://blog.mathemagenic.com/ 2006/10/03.html#a1839>

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