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This article provides information about the knowledge economy with its distinctive features:
In knowledge economy economic wealth is predominantly produced by using knowledge. Indeed it is an emerging society whose economic base is widely shaped by the processes of generation, dissemination and exploitation of knowledge.
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The neoclassical economists have emphasised on labour and capital to be key factors of development. To Paul Romer knowledge is the third factor of production and long- term growth it is the basic form of capital and that economic growth is driven by its accumulation.
The overall features of knowledge economy can be summed up as follows:
i. In knowledge economy knowledge is a public good, as this becomes object of wide use.
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ii. As the knowledge economy is dependent on generation of knowledge for its prosperity here knowledge gained by experience is as important as formal education and training.
iii. A knowledge economy is to become a learning economy in order to utilise its full capacity and to take its optimum advantage. Learning means not only using new technologies to access global knowledge, but also to using them to communicate with others about innovation. In the learning economy individuals, firms and countries will be able to create wealth in proportion to their capacity to learn and share innovation. Formal education, too, needs to become less about passing on information and focus more on leading people how to learn. Learning thus becomes a life-long process in knowledge economy.
iv. According to OECD, ICTs are the facilitators of knowledge creation. In the knowledge economy ICTs are the tools for releasing the creative potential and knowledge embodied in people. Wealth generation is becoming more closely tied to the capacity to add value using ICT products and services.
Mondal highlights in a study that each job at Microsoft created million new jobs in Washington State, whereas a jobs at Boeing created million jobs. In the information age individuals are put in the centre of the knowledge and skills based society. More than ever before, individuals want to master their own lives and expect to contribute to economy and society. The development of individuals as active citizens of society is increasingly given a central place in statements of learning, education and training objectives.
The individual is becoming the architect and builder responsible for developing his/her own skills, supported by public and enterprise investment in life-long learning. ICTs are empowering the individual from a passive teacher-oriented approach to gaining knowledge; there is a shift towards learning for life and work, centred around the individual. The need to learn how to access, analyse and exploit information and transform it to new knowledge is increasing and in particular the Internet based technologies, offer great opportunities. The empowered individuals or the knowledge workers take charge of all spheres of society.