The way we learn and work today looks nothing like how our parents or grandparents did. Most of us don’t go to university to study one isolated subject, and very few go to work and do the same task over and over again for their whole lives.
As our world becomes more globalized and tech-driven than ever, we’ve shifted to a dynamic knowledge economy that encourages multidisciplinary training and innovative thinking.
The pace of change shows no sign of slowing and, as a result, the knowledge economy is becoming increasingly dynamic. How can we stay ahead? We need to be ready to adapt.
What is the knowledge economy?
Traditionally, global economies centered around land, labor, capital, and workers—which are all tangible assets.
But in the late nineties, developed countries began transitioning towards a different economic model: the knowledge economy.
A knowledge economy is an economic system of consumption and production that is centered around intellectual capital, ideas, and information. This information could range from data and facts to expertise and experience. Unlike its traditional counterpart, a knowledge economy’s assets are essentially intangible.
Many of today’s developed economies now depend on knowledge to generate growth. For example, the work of researchers or consultants, or the patenting of scientific discoveries. Knowledge has become commercialized and commodified.
The advent of the Information Age and the boom in digital technologies further fueled the transition towards a dynamic knowledge economy. Today, tech companies like Amazon and Apple are the driving force behind our economy. The value of these companies lies not in their physical products but in their intangible ‘knowledge’ assets: their software, expertise, and designs, for example.
The emergence of the dynamic knowledge economy
The knowledge economy is driven by technological advances. And as technology is developing faster than ever before, the knowledge economy is becoming increasingly dynamic.
As a result of this growing economic dynamism, companies need to work hard to keep up. Businesses need to be flexible, ready to adapt to continuous change. And professionals need to be ready to upskill—to develop new competencies to meet advances in technology and economic upheaval.
But the nature of economic competition has also changed. The dynamic knowledge economy requires information to be shared and for knowledge to be pooled in order to promote innovation and the creation of new products and services. The bid to disseminate knowledge is leading to a more intimately connected economy with companies exchanging information and depending on each other’s knowledge to advance.
Sharing knowledge is different to sharing capital in that it doesn’t run out. There’s no limit. Discoveries in one industry can spill over and create advances in another. Sharing knowledge benefits everyone involved, stimulating development in all areas.
What is the role of industry?
Although we might associate the knowledge economy with Silicon Valley and the tech giants, industries such as manufacturing, agriculture, energy, and transportation are also instrumental in the development of the knowledge economy. They generate a lot of the research that contributes to innovation and represent huge markets where advances in knowledge can be applied.
How does growth in knowledge affect the economy?
Knowledge is now a source of major economic growth, driving competition and innovation. How a society generates and shares knowledge today determines its social and economic status. As a result, investment is now increasingly focused on technology and education, with the training of a highly skilled workforce who can contribute to knowledge generation.
In the past, increasing production was always a priority. Nowadays, it’s less about producing knowledge for knowledge’s sake, but rather about innovation. We don’t want to simply generate more knowledge but instead solve problems and approach challenges creatively. We need to think critically and consistently push knowledge boundaries.
What does this mean for education?
Society is changing rapidly, and such changes demand a new approach to learning. The standardized approach to education that has been the norm for so long is now being disrupted. A more student-centric model of education is emerging—one that understands that the workers of tomorrow need to be agile, adapting quickly to constant change.
To thrive in today’s workplace, a university qualification isn’t enough. Knowledge workers need to also have communication and problem-solving skills, to be able to work well in teams, and to demonstrate exceptional technological know-how.
Furthermore, given the dynamic nature of the knowledge economy, workers need to be ready to constantly develop their skills and competencies. Learning becomes a lifelong process.
As a result, instead of focusing on teaching specific skills, education systems need to prepare students for a process of ongoing learning. We need to help them develop decision-making and problem-solving skills and their ability to adapt. Instead of simply transmitting knowledge to students, teachers must show students how to derive value from information and to evaluate it.
Finally, as powerhouses of knowledge, universities need to integrate and connect with corporations to allow a mutual exchange of understanding and expertise. This will promote further growth within the dynamic knowledge economy.
“The ability to analyze and understand data has become so important in the modern world, and I also think it can be really enjoyable to learn about data analysis and the important and interesting things it can teach us.” Andrew Bertoli, Professor of the Bachelor in Economics
Knowledge has become one of the most valuable assets you can have in today’s society. For skilled graduates, the growth of the dynamic knowledge economy offers the opportunity for rewarding and highly paid work in newly evolving areas in research and technology and knowledge services like finance, business, insurance, and communication.
At IE University, we understand that the dynamic knowledge economy is demanding. For this reason, we have developed a student-centric, innovative, and humanistic approach to learning, instilling students with an entrepreneurial spirit and equipping them with the skills they need to continuously adapt to an ever-changing world.