According to BusinessDictionary.com, it is an “Economy based on creating, evaluating, and trading knowledge. In a knowledge economy, labor costs become progressively less important and traditional economic concepts such as scarcity of resources and economies of scale cease to apply.”
Technology-based jobs tend to fall within the knowledge economy. So does creative content creation, particularly of a digital nature, including infographics, e-books and documents, online course curricula, and other digital content.
Investopedia has a slightly different definition:
“A system of consumption and production that is based on intellectual capital. The knowledge economy commonly makes up a large share of all economic activity in developed countries. In a knowledge economy, a significant part of a company’s value may consist of intangible assets, such as the value of its workers’ knowledge (intellectual capital). However, generally accepted accounting principles do not allow companies to include these assets on balance sheets.”
It goes on to explain that there are three main types of economies, agriculture, manufacturing, and service-based, with the knowledge economy including “research, technical support and consulting.”
While each of the main types of economies, agriculture, manufacturing, and service, depends on knowledge, what sets the knowledge economy apart from them is its heavy emphasis on intellectual capital that doesn’t necessarily produce a physical product. Computer coding falls squarely in the knowledge economy. Research and writing and marketing and consultants putting together reports and slide decks and conference presentations are all part of the knowledge economy.
As the world shifts to the knowledge economy, where does that leave Little Falls? Are we doing anything to encourage the creation of knowledge economy jobs and businesses? Can you think of examples of knowledge economy organizations that currently exist in Little Falls?