Knowledge Economy (KE) for Growth and Employment in MENA

Today’s global economy is one in transition to a knowledge economy (KE) focused on the production and management of knowledge where knowledge is a product; using knowledge technologies where knowledge is a tool, to produce economic growth and job creation.

Within inter connectivity and globalization settings, knowledge resources are as critical as economic resources and the application of knowledge is key for growth; where organizations and people acquire, create, disseminate and use knowledge more effectively for greater economic and social development.

The knowledge revolution incorporates education, life-long learning, science & technology (S&T), innovation and increased investment in R&D – more than in fixed capital, supported by ICT. Making effective use of knowledge in any country requires developing appropriate policies, institutions, investments and coordination across socio-economic regimes, education, innovation and ICT infrastructure.

In light of the dominancy of knowledge in post-industrial turned KE society; residing in organizations, tools, tasks and networks; knowledge transfer (KT) has become essential in organizing, creating and disseminating tacit knowledge within national models of advanced economies and policies, from resource-based to knowledge-based production. It is also defined as a process by which innovation is communicated through KT channels over time in socio-economic systems, as KT orients growth policies through increased knowledge content and innovation, heightened by inter-linkages and knowledge absorption (KA). Transfer channels include “individuals”; “ICT” such as the internet, e-portals, networks, software and linkages to academia; “processes” such as licensing, standardization, competitive awards, applications; and “transactions” such as FDI, trade, research and producer-consumer bi-directional KT. Foreign direct investment (FDI) and international trade in goods and services are two major cross-border channels for technology transfer; together with linkages among educational, research and international communities, ICT and migration (e.g. diasporas). Through these channels, information flow and spillovers are enhanced through foreign investment and trade equipment, goods, imports; expatriates, training, mobility, agreements and affiliation, inclusive reverse technology transfer or outward FDI. Suppliers provide new equipment as new knowledge for product enhancement through transfer channels, e.g. 27% of innovation expenditures in Germany come from equipment service delivery. Other spillovers and enablers include special projects, consultancies and special processes such as licensing or national competitions, emitting out of positive impact of knowledge between individuals within an organization that produces goods or services internally, or externally (outside the organization).

An individual, group, firm or nation’s ability to recognize the value of new information, assimilate it and apply it to commercial ends and in businesses, has been defined as the absorptive capacity, an enabler of innovation, based on developing cumulative absorptive capacity (Cohen and Levinthal 1990) and investment in R&D. The absorption capacity is key in KT and accumulation, as individuals, firms and countries absorb, learn and implement technologies and practices, while effectively using their acquired knowledge.

The full study titled “Knowledge Economy (KE) for Growth and Employment in the MENA Region Case Study on Knowledge Transfer (KT) to Jordan” is the work of Mrs. Reem N. Bsaiso and can be found here

Published: 03/04/2012