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Knowledge economy: implications on education and training

Knowledge economy: implications on education and training

Knowledge has always been important for economic development. Globalization and technological revolutions transform the contemporary economy into the knowledge economy. In this economy, a new form of organizations and work govern the world of business, demanding the rapid development of skills, solid knowledge and greater responsibility. Contemporary society thus becomes a learning society, adapting to the new, and in this context educational systems must aim at the formation of people able to contribute to the development of their own competencies, to integrate fully in the socio-cultural context in which they live.

There are certain numbers of factors which have contributed to such a development:

  1. Technological progress
  2. Globalization of the world economy
  3. Increased importance of specialized knowledge
  4. Increased awareness of the importance of knowledge economic development
  5. Creation of new jobs

These trends indicate that knowledge economy describes a positive effect of knowledge on economic growth. Asia Pacific Economic Cooperation (APEC) and Organization for Economic Cooperation and Development (OECD) define that the knowledge economy is a term that is associated with new skills, high performance and new added value as the only way for enterprises and countries to compete in the global economy. Even though with different levels of progress all of the OECD countries are moving towards the economy based on knowledge. It also defines as application of knowledge based industries where the knowledge becomes the key competence. This view on the knowledge economy opens new possibilities and gives hope to transition economies regard less of their size, availability of natural resources, level of industrialization, level of economic development.

Knowledge economy have far-ranging implications for education and training:

A knowledge economy rests on four pillars:

  1. A supportive economic and institutional regime to provide incentives for the efficient use of existing and new knowledge and the flourishing of entrepreneurship.
  2. An educated and skilled population to create, share, and use knowledge.
  3. A dynamic information infrastructure to facilitate the effective communication, dissemination, and processing of information.
  4. An efficient innovation system of firms, research centers, universities, consultants, and other organizations to tap into the growing stock of global knowledge, assimilate and adapt it to local needs, and create new technology.



Development of a knowledge economy involves changes across many aspects of the economy. There are numerous knowledge economy frameworks which provide a basis for knowledge economy development. But, not all of these frameworks are suitable for each country and its specifics. Based on experiences of many countries The World Bank Institute (WBI) introduced indicators that provide guidance in measuring of knowledge economy development. Those are as follows:

Implications of the knowledge economy for education and training

Preparing workers to compete in the knowledge economy requires a new model of education and training, a model of lifelong learning. A lifelong learning framework encompasses learning throughout the life cycle, from early childhood to retirement. It includes formal, non-formal, and informal education and training.

Recent knowledge and the accumulated stock of human capital are inputs in the production of new knowledge and wealth. The speed of change in the knowledge economy means that skills depreciate much more rapidly than they once did. To compete effectively in this constantly changing environment, workers need to be able to upgrade their skills on a continuing basis.

Change in the knowledge economy is so rapid that firms can no longer rely solely on new graduates or new labor market entrants as the primary source of new skills and knowledge.

Schools and other training institutions thus need to prepare workers for lifelong learning. Educational systems can no longer emphasize task-specific skills but must focus instead on developing learners’ decision making and problem-solving skills and teaching them how to learn on their own and with others.

Lifelong learning is crucial in enabling workers to compete in the global economy. Education helps reduce poverty; if developing countries do not promote lifelong learning opportunities, the skills and technology gap between them and industrial countries will continue to grow. By improving people’s ability to function as members of their communities, education and training also increase social capital (broadly defined as social cohesion or social ties), thereby helping to build human capital, increase economic growth, and stimulate development.

Education must thus be viewed as fundamental to development, not just because it enhances human capital but because it increases social capital as well.

[box type=”note” align=”” class=”” width=””]The author, Mr. Nazir Ahmed Shaikh, is a freelance columnist. He is an academician by profession and writes on diversified topics. Currently he is associated with SZABIST as Registrar and could be reached at[/box]

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