The document discusses the importance of knowledge economies in Asia. It defines knowledge economies as economies that rely on knowledge as the main driver of economic growth, with four key dimensions: educated workforce, innovation system, information infrastructure, and economic incentives. It outlines how several Asian countries like China, Japan, and South Korea have transitioned to knowledge economies. It also analyzes empirical studies showing the positive impact of knowledge economy dimensions like education, R&D spending, ICT infrastructure, and good governance on economic growth in Asia. The document concludes that for Asian countries to sustain growth, they need large investments in education and building strong knowledge economy dimensions.

1. *Aamish Waqas,MS(ManagementSciences),SZABISTIslamabad.aamishwaqas@gmail.com
Introduction
The roots of Knowledge economy goes back to Industrial revolution from 1760s to 1850s, when
technological innovation boosted the economic expansion (Jacob, 2014). Traditionally, lots of
dependence was on labor and capital as sources of economic progress and wealth generation.
However, past two decades have witnessed vital role of knowledge economy in developed and
prosperous countries (Tchamyou, 2014). Leading economies like Malaysia, China and Japan are
moving swiftly towards Knowledge based economy (Asongu, 2015). For any country to be
competitive and involved in global economy, reliance on KE is a must (Tchamyou, 2014). It is a
known fact that, four pillars of World Bank’s knowledge economy Index, economic incentive,
innovation, education and information infrastructure are the key drivers for economic
development.(Asongu, Amavilah and Andres, 2015). This all is easily achieved because of good
governance which influence knowledge creation and diffusion processes (Huang, 2018).
What is Knowledge Economy?
Knowledge and Information are the essential ingredients to economic progress and development.
(Qamruzzaman,Ferdaus, 2014). Simply speaking, any economy is based on knowledge is
Knowledge economy, which has four dimensions, an economic incentive and institutional
regime, educated and skilled workers, a modern and adequate information infrastructure, an
efficient innovation system (Asongu, Amavilah and Andre´s, 2019). Knowledge economy can
also be defined as “one that uses knowledge as the key engine of economic development. It is an
economy in which information is learned, shaped, dispersed, and used well to boost economic
growth” (Dung, Hoai, Kien, 2016). In general terms, knowledge economy considers
information as the economy's main tool and pusher relative to other material resources. It is
equally important in the agricultural economy, in addition to land and labour. That will guarantee
profitability and positive growth (Ahmed, 2017)
Asian Knowledge Economy
Knowledge based economy is very fundamental for boosting Asian business. It is indispensable
to withstand high paces of improvement in the coming occasions and prospect whereby
advancing economies can bait from valuable slanting advancements which can allow them to
move more briskly in global value chains and find placements globally. Asian countries have
witnessed rapid growth in economy and wealth because of easy and cheap availiablity of labour.
(Qamruzzaman,Ferdaus, 2014). To sustain, further development and in order to compete with
emerging economies of other world, knowledge economy has become quite essential for Asian
countries. Prominent Asian countries like, China, Indonesia, Japan, Pakistan, Singapore, South
Korea are on the path of emerging economies and will be the leaders of tomorrow. Emerging
Asian economies can follow KE direction set by Japan (Tchamyou, 2014).

2. *Aamish Waqas,MS(ManagementSciences),SZABISTIslamabad.aamishwaqas@gmail.com
There are several challenges that they are facing. Firstly, there is a need of system for training.
Many countries have inadequate facilities, equipment, or instructors. Various arrangements
might be, making additional preparation foundations, forcing expertise exacts, and utilizing
apprenticeship models. Secondly, lessening abilities disjointed qualities and expanding the
connections among preparing and industry needs. Arrangement might be ''train the mentors''
model. Thirdly, these countries essentially need to improve their skills teaching systems and their
consequences. Finally, businesses must contribute more and take some ownership of training
efforts. Main flaw in emerging Asian countries is industry’s association to training. These
challenges cannot be dealt with in isolation. An integration of all strategies is required.
(Martinez, Fernandez, Weyman, 2014)
Asia comprises 40+ countries with GDP approximately 40% of the world (IMF, 2016). All
OECD countries are encountered of skill development and Asian economies are dealing well
with this by making indigenous tactics and processes to develop skills in their manpower.
(Martinez, Fernandez, Weyman, 2014). As per the income distributiuon, certain Asian countries
are having middle income famailies. To reach at High income levels like other developed
countries, Asian countries must inculcate the culture of knowledge based economy. Asian
development bank institute suggests making policies for infrastructure and human capital
investment in order to develop knowledge based industries keeping in view the rapid demand for
research and scholarly knowledge (Sagiyeva et al, 2018)
There are some prominent examples of Republic of Korea and Singapore, Peoples Republic of
China (PRC), India and Indonesia who developed themselves as knowledge based economies.
Talking about innovation, PRC is leading with R&D expenditure of 2% of GDP. Its innovation
score is greater than average when comparing to any other Asian countries. Tertiary admissions
are increasing rapidly. Prominent e-commerce positions will result jobs in the high-tech services
sector with several innovations in telecom infrastructure, broad band network and growth of
human resources for a digital economy. (Mauro, 2015).
Indonesia as a decentralized country, there is a wider range of creative programs that can
capitalize on the strengths of regional benefits and indigenous talent. Nation spends large sums
of money on education and innovation. They need to further grow in ICT.India is also
contributing towards promoting Knowledge based culture to boost its Economy. Recently they
announced innovation fund, which is a right step to future. Although their efforts to skills
development are commendable, they need further improvement in education (ADB, 2014)
Analysis – Role of Knowledge economy dimensions in Asian countries
There are number of empirical studies regarding effects of Knowledge economy dimensions on
economic expansion (Sagiyeva et al, 2018). Hassan and Cooray (2015) research proves the vital
role of education in economic growth. They examined the effects of school enrolment on
economic development taking variety of gender groups in Asian perspective, and the results
showed that the effects of education are considerably positive for both males and females at all
educational levels including primary, secondary, and tertiary ones.

3. *Aamish Waqas,MS(ManagementSciences),SZABISTIslamabad.aamishwaqas@gmail.com
In innovation dimension, Agénor and Neanidis (2015) conclude that extra innovation routine
enhances economic growth unswervingly. It was studied the role of R&D spending in economic
progress of evolving economies during the period 2000 - 2009 with the sample of 66 countries
comprising together upper middle-income and lower middle-income countries. The results show
that R&D spending has a positive effect on growth in higher medium-income nations, but it is
insignificant in the case of lower income countries (Inekwe ,2015)c
Castellacci and Natera (2016) proved positive relationship between strong innovation policies
and economic development. As for as the dimension of information and communication structure
is concerned, extensive studies have been done in this area too including, Erumban and Das
(2015) and Jorgenson et al (2015), and all proved that ICT is positively associated with economic
development. Jorgenson et al (2005) concluded that investment in ICT has a positive and
significant effect on development of global economy.
Political institutions make economic institutions, which results in economic growth, hence
concludes that political institutions provide impetus for economic development (Flachaire et al,
2014). It is quite conclusive from above mentioned studies and results that four dimensions have
a positive and significant impact on economic growth. Indonesia and Pakistan, being highly
enriched with labour force have only primary education levels. These countries require huge
investments in education sector. Without education, skills, technology adaption attitude and
innovation countries won’t be able to follow sustainable development of economy (Martinez,
Fernandez, Weyman, 2014).
Conclusion
Right now, Asia needs to solidify and get its financial development on quick track. Asia is
situated in an outstanding crossroads in history with numerous advantages that can fill in as a lift
like, a growing center of the pyramid — liable to hold half of the worldwide white collar class
and 40% of the worldwide shopper showcase by 2020. Many rising economies are all around
situated to coordinate wilderness advancements into their modern condition (ADB, 2014).
Developing economies need to address issues like, gaining from the information on dynamic
economies, continuous and efficient speculation and strategies to manufacture R&D capacity;
interests in Generating a more profound load of human capital; developing instruction
frameworks that give the capabilities needed to update insight into key focused areas of
information; setting up proper monetary, operational and motivating frameworks to help draw
businesses from a specific private sector; synergist pretended by the legislature, especially in the
beginning times of KBE procedures to make the atmosphere required to pull in the private part;
fundamental extension of the quality and value of higher education, applied science, and industry
– college organized efforts; and the interests of the telecommunications and ICT foundations that
penetrate the economy and yield several side projects, for example, better conveyance of
taxpayer driven organizations, improved administration, exchange administrations, and
connections with worldwide stockpile chains (Inekwe ,2015).

4. *Aamish Waqas,MS(ManagementSciences),SZABISTIslamabad.aamishwaqas@gmail.com
Information and abilities are essential however not adequate. Firms in KBEs progressively
require "skill" instead of simply guaranteed capabilities—a blend of "hard" and "delicate"
aptitudes. New formal professional also, scholastic instruction and preparing need to offer ascent
to a wide assortment of exceptionally gifted specialized also, proficient ability. A key trait
expected of training frameworks is to grow increasingly adaptable furthermore, responsive
projects to give the fundamental capabilities and abilities required in the commercial center.
Nations that have done well to fortify the status connected to higher professional examines for
example, Singapore and the Republic of Korea, offer great exercises for creating economies. The
Republic of Korea's customized training prompted fruitful business and the formation of human
capital that endeavors required. An variety of higher-quoted professional and polytechnical
degrees and applied degrees aside scholastic capabilities is needed (Sagiyeva et al, 2018).

5. *Aamish Waqas,MS(ManagementSciences),SZABISTIslamabad.aamishwaqas@gmail.com
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