In 2011, 19 years after the death of Hayek, his article, “The Use of Knowledge in Society”, was selected among the top 20 studies published by American Economic Review during its first century.
Undoubtedly, the development of economic correction theories and the entire economic thought has resulted in re-thrusting knowledge economy to the forefront. There are dozens of modern publications on knowledge economy with exactly the same title, as if writing about this topic is a scientific degree that elevates its holder.
Knowledge and human evolution
Knowledge has walked hand in hand with human evolution and contributed greatly to changes in civilization. Although it has operated through tight margins and was often restricted to industrial and cultural loci, knowledge proved capable of triggering successive revolutions that altered the course of history.
At the top of those revolutions was that of computer technology, which broke out in the second half of the twentieth century as a result of a structural transformation in civilization. Thanks to the evolution of computer technology, knowledge spread at a faster pace and went on growing and expanding by the day, or rather by the second in order to respond to the rapid nature of such technology, thus heading to far-reaching horizons that we did not even know existed before. Nowadays, half the GDP of modern western countries is based on knowledge intensive economics.
This turning point manifested in a drastic change that extended to the entire environment of human civilization including the resources, tools and capabilities of human beings. Evidently, the long-term impact of the fruitful historic pairing between computer and telecommunications can be tracked easily on the course of human life and the potential, facilities, convenience and opportunities that this pairing has granted so far, serve as a title to a historic tilt in the relation of human beings with their universe. Nowadays, economic growth is tied to technologies rather than an increase in capital and workforce.
The spread in knowledge and its tools in an unparalleled manner was a natural outcome in the aftermath of information technology. A massive flux of science and knowledge, of which the greatest thinkers of the past centuries couldn’t even dream, became accessible to all humans, and the monopoly of knowledge was no longer possible in an era of immediate information diffusion. The communities based on industrial economies shifted into technology-oriented economies focusing on producing and distributing information. Services emerged as a critical element in contributing to the nations’ revenues and the traditional historic structure of economy took a different shape and paved the way for the domination of the third sector over the first two. Today, the isolated independent national economies are fading and becoming parts of an integrated interdependent global economy. As for the industrial community, one quarter of it is absorbed in manufacturing and development operations, while the rest is attending to services, with two quarters in the information technology sector. In other terms, we came up with a new information-intensive capital to replace the energy-intensive one.
Another critical factor revolves around the radical change that affected the meaning and nature of living and non-living natural resources, due to the rise of information as a brand new strategic resource that complements natural resources in the economic life. This resource is unique in the sense that, unlike natural resources, it may be divided, expanded, compressed and transferred and doesn’t necessarily diminish with excessive use. Unlike natural resources, immoderation in the use of information doesn’t induce its depletion but rather amplifies its value.
Today’s economic world is split into two main trends. The first dominates those countries known as the post-industrial countries whose economy has evolved into a service and information-based one and is heading now towards an economic understanding of knowledge through an accommodation of the economic sectors striving to produce information and services and to create new technologies to process, spread and distribute them. The second and most prevailing trend is that based on traditional and non-futuristic economy wallowing between traditional industries, agriculture and some services.