Knowledge economy debate needs to move beyond platitudes

The debate about the ëknowledge economyí is full of ëslovenly thinking and careless assumptionsí, The Work Foundation alleges today.

Politicians, businesspeople and opinion formers around the world use phrases such as ëknowledge workerí and ëknowledge economyí as speech-padding buzzwords without having ëany clear idea of who or what they are talking aboutí, a new study argues.

In Defining the Knowledge Economy, the first paper in The Work Foundationís three-year investigation into the phenomenon of the knowledge economy, Ian Brinkley, the programmeís director, says that despite half a centuryís talk about the emerging knowledge economy ëno robust definition of what it is has so far emergedí.

Brinkley says: ìIn broad terms, we know that the knowledge economy is what you get when organisations bring together powerful computers and well-educated minds to create wealth. And we also know that this combination is a new thing in the history of the world: firms in the knowledge economy compete on their ability to exploit scientific, technical and creative knowledge bases and networks.

ìThe difficulty is coming up with a measurable definition that allows the hype to be tested against hard facts. Around the world, governments talk about the future belonging to ëknowledge-based industriesí and ëknowledge workersí without bothering to question which firms and individuals are in and which are out of these categories.î

For example, in the UK:
Knowledge workers have in the past been defined as all those in managerial, professional and associate professional jobs. The share of such jobs in total UK employment has increased from 31 per cent to 41 per cent comparing 1984 and 2006 and is forecast to increase to 45 per cent by 2014, according the Sector Skills Development Agency.

But included in this group are managers of shops, garages, farms, funeral parlours and warehouses ñ not necessarily archetypal knowledge workers. Almost a quarter of all managers should not be included, The Work Foundation argues. Remove them and the knowledge workforce looks smaller than previously claimed: 38 per cent (11.1 million workers) could be said to be ëknowledge workersí.

Knowledge-based industries are defined by the OECD as high to medium tech manufacturing (eg pharmaceuticals, aerospace, electrical engineering); financial and business services; telecommunications; and education and health. In 2002 these industries accounted for 41 per cent of UK gross value added. This compares with 43 per cent in the US; 42 per cent in Germany and Sweden; 40 per cent in France and 35 per cent in Italy.

But shouldnít the creative industries (such as film and television production, advertising and marketing) be included as a ëknowledge industryí? And isnít there a case for including some public administration roles?

Brinkley adds: ìThese questions can, at first, seem petty and technocratic. But behind them lies a momentous question. If, as virtually every serious economic commentator believes, the productivity of knowledge-based work is critically important to our future, then it is essential to try and measure knowledge accurately and logically. The slovenly thinking about what constitutes ëknowledge workí needs to be challenged.î