Knowledge-based Economy: A New Approach

There is a growing belief that knowledge can do more than increasing the economic growth; it can also lead to structural change in an economy and therefore in society. Such change differs from the incremental changes to which all economies are constantly subjected. Today, the new products and services resulting from technology growth may bring about profound changes in the way we live and work. Therefore, the economic transition is characterized by the changing nature of work from low skill to high skill. This is reflected in the rapid growth in the services sector since 1960s and recent changes in the goods-producing sector towards employing higher-skilled employees. The need for Knowledge-based Economy (KBE) is use of knowledge as the main driver of growth, wealth creation and employment across all industries. Rather, all industries in the economy can be knowledge intensive, including so called ‘old economy’ industries like mining and agriculture. Further, the knowledge required by a knowledge-based society is wider than purely technological knowledge; for example it also includes cultural, social and managerial knowledge. The paper presents the emergence of KBE and its impact on India by discussing two parameters: education and Information & Communications Technologies (ICTs).