Knowledge Economy - Essay Example

A knowledge economy can exhibit itself in the interconnections between science and technology; the emphasis on creativity as critical to economic growth and competitiveness; the increasing focus on education and life-long learning; and the orientation toward investments in intangible goods and services, such as R&D, rather than fixed capital; and the rapid adoption of information and communication technology (ICT) that is providing nations greater independence as well as greater connectiveness (Archibugi & Pietrobelli, 2003).

However, some contend that the expansion of knowledge economies within developing nations can also bring with it negative consequences, such as increasing the divide between developed an developing nations, and crowding in their economic development (Casanueva, 2001; Pietrobelli, 2000). This paper aims to present the argument that a knowledge economy within a developing nation can contribute to numerous negative effects on a countries economic and social development. Firstly, the positive arguments that promote the adoption of a knowledge economy by developing nations shall be presented.

Secondly, the contrasting negative impact consequences to the adoption of KE shall be provided. Finally, a conclusion shall synthesise the main points of the paper and make recommendations for future research. It is generally conceded that a knowledge economy can positively contribute to the development of a nation's economic and social institutions by way of facilitating more effective goods and services production and delivery, lowering costs to public citizens (Archibugi & Pietrobelli, 2003).

As such, developing nations are encouraged to adopt a knowledge economy as an efficient method for improving their competitiveness on the global marketplace, as well as alleviating their welfare needs. In order to effectively incorporate a knowledge economy it is necessary for developing nations to capitalize on their economic and social strengths, and also to plan appropriately on how to invest in human capital, social institutions, technology and innovative and competitive businesses (Kuznetzov & Sabel, 2003).

Countries such as Chile, Ireland, Malaysia and Korea are portrayed as success stories of countries, which have incorporated a knowledge economy into their social and political value systems (Kuzetzov & Sabel, 2003). Increasingly, science-based products and services are being incorporated into world trade, foreign direct investment (FDI) of multinational corporations to facilitate innovation globally, and cooperation across the boarders of scientific and technological research and development (Narula & Sadowski, 2002).

Less developed countries are able to benefit from the increasing flow of knowledge if they are able to implement active policies that focus on enhancing learning opportunities and improving access to new knowledge and technology (Archibugi & Pietrobelli, 2003). Additionally, the opportunity to participate in the 'brain circulation' of open migration of people and their knowledge across boarders provides job prospects and educational experiences that prepare the LDC citizen to participate in a global workforce (Kuznetsov & Sabel, 2003).

Additionally, a study investigating indicators that represent knowledge within 92 nations, during the period