Knowledge-relevant economic policy

Shared knowledge and collective intelligence has replaced the three traditional pillars of value creation: land, labor, capital. In this new age, nonetheless, knowledge capacity is underutilized as many industry leaders do not recognize the power of intellectual capital and favor more rigid approaches to managing people and the fountains of innovation they represent, both individually and collectively. It is difficult for traditional management to accept that voluntary and open, market-based communities of knowledge practice provide flexible processes of disciplined pluralism and promote innovation, as opposed to the rigid processes of forced allegiance to other forms of knowledge management, such as through guilds.

Therefore, the fundamental political problem of knowledge-led economic growth is that of devising the appropriate means for channeling government action into support for markets driven by community knowledge practices.

With the advent of the knowledge economy, the stage has been set for ensuring the flow of knowledge and intangible assets (e.g., brands, patents, R&D projects, trained staff) by means of policy measures. Accordingly, policymakers step into the role of context builder that should favor human interactions for the transformation of those assets into wealth creating resources. The prevailing doctrine, stated simply, is that policymakers have to deploy and direct resource towards the intellectual capital with a view to exercising more effective sway over individuals and organizations that create, disseminate and transform knowledge.

If there were a growing recognition among policymakers that the power of knowledge innovation is a fundamental driver of strategic changes, governments, accordingly, would do much to downplay subsidies as a way of promoting knowledge innovation. In the frame of open-ended market guidance, a new knowledge policy would be structured by which more stress would be laid on a greater role for the array of initiatives that free agents could put in practice both within national frontiers and across borders.

Inasmuch as the international community were to become committed to sustaining the emerging trend and accounting for the challenges of the knowledge economy, policymakers would be focusing more attention on the principles of freedom, openness and institutional fluidity of knowledge innovation communities, which embody the principles of the free-market economy, are on sustained trends of growth improvement.

The greatest challenge firms face today, in the knowledge economy age, is that of being connected with knowledge innovation agents in a meaningful way to enhance their capacity to handle innovation as the process to put knowledge into action. The economic policy that complies with this challenge contends that free makers of knowledge innovation and free knowledge markets are corollaries, and hence embraces the principle of a light, free market-supporting regulation.

The value proposition of knowledge policy is that it helps shape a new market context in which a powerful step toward building a knowledge-intensive economy is taken by communities of free agents of knowledge innovation. By this view, the struggle of the free economy remains at the heart of the debate on knowledge-relevant economic policy.