May 2005

The Knowledge Economy is Real

Published in the Ark Group magazine "Inside Knowledge" May 2005
By Debra M. Amidon

People are no longer asking the question "if"; they are asking “how” – how might we harness the intellectual capital of our companies, nations and society-as a whole. The dialogue is happening from the aboriginal communities of Alice Springs, Australia, to the creative, intelligent cities of most industrialized, transitional and developing economies around the globe. Answers are surfacing; and at least now we are asking some of the *right* questions.

In this sense the economics of the Knowledge Age are raising important questions. Questions that deal with individuals, organisations, communities and policymakers on the border of the innovation-based society characterized by an increasing degree of stakeholder interaction and high sustainability intensity. Three principles of knowledge dynamics appear to have emerged:

(1) Knowledge is the limitless and expandable source of economic wealth.

(2) Value is created when knowledge moves – is innovated – from point of origin to need or use.

(3) Collaboration for mutual leverage – synergistic win/win – provides optimal utilization of assets, both tangible and intangible.

Over the last decade, we have witnessed an explosion of IC doctoral theses, dedicated research centers, international conferences, books and research reports and evidence from hundreds of economics development initiatives from every region of the world to build knowledge cities, harbors, villages, corridors and companies. Visit some of these new Knowledge Innovation Zones (KIZs), such as the Knowledge Village of Dubai (Saudi Arabia), Forum 2004 of Barcelona (Spain), and the Knowledge Pearl of Leuven (Belgium) – just to name a few.

The notions of market-share and event measures such as GDP may soon be outdated modes of measuring progress or success. Even the triple-bottom-line (i.e., blending financial, social and environmental guideposts) are evolving into new indicators to gauge the flow of knowledge and intangible value amidst the complex process of stakeholder innovation led by global sustaining leaders like Novo Nordisk A/S. Now we understand that new leadership principles are emerging together with entrepreneurial innovation. This impetus leads to new governing policies and modern management practices all in the name of new performance standards based upon the flow of impact, not even output or outcome. Real-time performance measures are emerging; and history will document our success.

In July 1944, world leaders left behind gold as a currency. Today, it is well recognized that we have entered a new innovation frontier in which intellectual capital – properly leveraged through relationship capital – is rapidly becoming the new currency. It has been 60+ years since Henry Morganthau issued his challenge at the Bretton Woods conference to “Create a dynamic world community in which the peoples of every nation will be able to realize their potentialities for peace.” Perhaps now is the time for the Bretton Woods of the knowledge economy and IC is the asset to be leveraged worldwide.