What exactly is what is the Knowledge Economy (and Why Should you be Concerned)?
It's no secret that the economic landscape has seen a shift since the start of the pandemic. Shutting down brick and mortar companies, shifts to online work and education, as well as labour shortages have led to an entirely different environment than prior to COVID. However, with the change come fresh opportunities, particularly for entrepreneurs.
- What exactly is knowledge economy?
- Where is the knowledge economy going?
- The knowledge economy in action
- Creators of courses
- Technology companies, agencies, and consultants
- How can you benefit from the economics of knowledge?
What exactly is the concept of knowledge economy?
A knowledge-based economy (KDE) is an economy model in which the primary commodity is knowledge, rather than physical products.
This means that instead of only placing value in the sale and purchase of physical goods (like automobiles, shoes, or even shoes) Value is given to innovation, knowledge or discovery as well as any other intellectual capital (like the IT infrastructure, branding, research or even consultancy).
The concept of "knowledge economy" has been around since the mid 1950s but started to become most prominent in the late 1980s to the early 2000s. The knowledge economy was about research and development and a growing demand for science-based innovation.
An indicator of the importance on innovation was the growth of total patents granted by the United States Patent and Trademark Office (USPTO). In 1981 the USPTO granted patents to 71,114, as compared to 187,053 patents in 2003. The most recent time, in 2021, 374,006 patents were granted, showing no sign of innovation slowing down into the next decade.
The knowledge economy has become a huge element of the world economy, with millions engaged in areas that include marketing, customer experience engineering, design and education, to name a few. Value is highly placed on tangible assets such as branding, software, as well as patent-pending designs.
The World Bank Institute outlines four elements that are essential in order for the economy of knowledge to flourish.
1. Structures that offer incentives to entrepreneurs and encourage the use of knowledge
For instance it is for instance, the US government is a big supporter of small-business innovations through its Small Business Innovation Research program. The program encourages entrepreneurship as well as research with grants ranging from $150,000 to $1,000,000. The goal of the program is to encourage technology-driven innovation and assist the "United United States develop entrepreneurial mindset as it meets its specific demands for research and development."
2. The availability of skilled workers and an education system that is well-developed
3. Effective innovation systems for businesses, research centers colleges, consultants as well as other organisations
It could refer to any non-governmental institution which promotes innovation like research labs or think tanks. In this case, for instance it is the European Organization for Nuclear Research (CERN) has 12,200 scientists from 70 countries and is the most prestigious Physics laboratory worldwide. CERN is a leader in innovation worldwide and also developed the world's largest and most efficient particle accelerator in the year 2018.
4. The accessibility of information and communications technology (ICT) infrastructures
The first thing that comes to mind is Google. Through Google individuals have the means to answer every question with the click of their fingers via tablets, phones, and even computers. Also, they have the capability to interact via chat or email. Internet and search engines allow access to the information infrastructure available worldwide.
Where do we see the future of knowledge-based economy?
Presently, greater than 70% of patents issued as well as the creation of technical and scientific publications is done in developed nations. There's a clear difference between developing and developed nations when it comes to the economy of knowledge.
But that doesn't mean developing countries can't profit from the knowledge economy. Thanks to the internet and a myriad of methods to gain knowledge and make money online, there is greater opportunity than ever before. Entrepreneurs in developing countries can take advantage of global information to boost their chances of success.
It's not to say that the industries and agriculture will disappear anytime soon. There is still a need for vehicles, shoes furniture, appliances and many more. And of course, we still need food. But tapping into the information economy can be a great way for entrepreneurs to make money - and sometimes help others along the way.
When information is made more readily accessible, the economy of knowledge is expected to continue growing. This makes this an optimal moment to get involved and profit.
The knowledge economy in action
This is how we've identified what the knowledge economy is, and where it might be headed. But who are knowledge entrepreneurs, and what are they working on?
It's likely that you've heard about the most prominent companies operating within the realm of knowledge. We've previously discussed Google but Amazon as well as Apple are excellent examples. All of these companies leverage the power of knowledge to bring amazing innovation. From changing the way we shop online to virtual assistants Siri, Alexa, and Google Home and books and reading on the internet.
It's a bit difficult to relate to these massive businesses where many thousands of employees are working towards the corporation's development and growth. There are many smaller entrepreneurs and companies benefitting of the knowledge economy as well as gaining their own success. Here are a few of them:
Course Creators
Tonya Rapley, founder of myfabfinance.
Suzana Somers is the founder of BachelorData Academy
Suzana learned how to analyse data by watching the television series The Bachelor. This fun project led to her creating an Instagram account on which she shared the results of her analysis. Her account became so popular Suzana made the decision to start an analysis of data course to spread her expertise. The course was published in magazines like Vanity Fair, and she's helped her students learn the art of data visualization without having any formal education in this field. Since she presented her expertise in a distinctive way, students instantly saw the value and would pay for it.
One of the reasons for the rise of knowledge-based entrepreneurship is the fact that it's accessible to all; an knowledge entrepreneurs doesn't have become an authority, a celebrity or have the backing of an established firm. Simply, they have the ability, knowledge, or passion which they wish to impart when the creation or expansion of a business.
(HTML0) - Greg Smith, Co-Founder & CEO,
Technology agencies, companies, and consultants
While we know creating online courses can be a great method to earn money, there are other options as well.
Customers of Shopify required help in marketing their online shops, so Shopify released email marketing and Facebook Ad integrations to make that simpler. Shopify is a completely new company that has transformed online shopping. Innovation and innovation have created Shopify the market leader, demonstrating the benefits of knowledge at work.
Companies that offer consulting, design or marketing services are also participating in the market for knowledge through selling their expertise to businesses. This could mean everything from helping companies improve their processes for organization, designing logos, to creating complete marketing strategies.
Another example of this is the tech startups that create apps or programs. The importance is placed on the infrastructure that code and can be used to build applications or software, and also the branding and the concept. All of these are the result of expertise and innovation which are part of the knowledge economy.
The examples above aren't in any ways the only possibilities for participating in the knowledge economy. The possibilities are nearly endless with regards to how to capitalize.
What can you gain from the economics of knowledge
The benefits of the knowledge economy are felt by everyone around the world. A higher price for knowledge is a reason to innovate new ideas, develop, and disseminate knowledge. But how can you personally benefit from the economy of knowledge?
Well, it depends upon what you intend to accomplish.
The first thing to do is to consider what interests you most attracted to and what are you already knowledgeable about. Are you a good writer? Sell your skills through a course, or even by a freelance job on Fiverr or Upwork. Good at cooking? Create an online cookbook or even make instructional videos on cooking. You may be able develop software, and you want to teach others how to code, so you start a bootcamp, or you offer a patent for the latest software for planning.
You get the point. When you've determined the level of your knowledge and skill set is, you just have to monetize it. A proven first step for that is to create an online class.
Making an online course that includes related products such as ebooks, live lessons as well as memberships are the best way to break into the knowledge economy. If you're skilled enough to do something successfully, there's an audience that's willing to buy the benefits the knowledge you provide.