What is the Knowledge Economy?

Labor and productivity play a foundational role in the human experience.  Through so much of our shared past and present the work that we do becomes a defining part of who we are and how we interact with the world around us.  History teaches us that while the nature of productive efforts changes, there is always more to be done and numerous methods establishing how to do it. While change is a proven constant, the precursor of awakening to new approaches and ideas is often a crisis.  In this first article of a series we explore what the new Knowledge Economy is and is not. Arguing throughout the essays that a proactive approach towards scaled implementation of the Knowledge Economy must be central to the Progressive narrative.

Society in the United States seems to go through peaks and valleys when it comes to active participation in the arrangement of society.     When a crisis arises, we see an increase in activity to shape the direction of how we address the circumstances generated.  A modern example is the surge of political activism and action stemming from the 2016 elections. Genuine transformation for good demands that we extend our expanding understanding of consciousness into our institutional arrangements, creating a structure that enables every person to choose between routine work and creative innovation at their discretion.   This is why a deep understanding of the latent potential of the Knowledge Economy is vital to the future of so many people.

Structure and Form

The Knowledge Economy is an economic system where the most advanced form of production requires highly skilled labor that is easily transferable between organizations. Our modern example being Silicon Valley. This type of work has already displaced manufacturing for the title of the most advanced form of production.   In many cases, most advanced will be defined as the most significant returns for input, but not necessarily in all. Knowledge Economy organiziations are the ones that reach the forefront of productive power and, more importantly, demonstrate the ability to stay at the forefront for the foreseeable future.

Central to the Knowledge Economy is the ability to create a high degree of customization of labor and output without requiring standardization.  You can imagine it as a blend of innovative experimentation and productivity, creating a form of employment that draws from humanity’s highest potential, our imagination.   Historically scientific advancements helped to drive advances in productive activity. Today we can observe how within the Knowledge Economy production becomes a vehicle for scientific progress.   

An example would be new products and services that utilize machine learning.  Each innovation builds upon advances in information technology while simultaneously pushing the envelope for what is possible with every new iteration.   Another example would be the increasing efficiency of 3-D Printing which is now allowing people to go directly from ideation to creation of products, saving significant time and resources for prototyping and developing material goods through third parties.  Both scenarios describe processes where the work of production and scientific discovery become intertwined, fundamentally redefining the nature of the labor involved. This reimagination of work, the blending of experimental innovation and creation, has profound consequences for humanity.  

Compare the shifting nature of work in a Knowledge Economy to many of the blue and white collar jobs of today.  For many people being productive in the world is limited to repetitive and machine-like tasks. A blue-collar example would be manual factory labor, taking part in an assembly line, fulfilling a single or set of repetitive tasks each day.     A white-collar case is being a fashion designer in New York City.  On the surface, it sounds like an appealing line of work but after better understanding the process it is apparent that it offers little more creativity than a traditional assembly line worker.  Designing is limited to repetitive and narrow sets of constraints provided through a top-down hierarchy with the primary value being quantities of output. Both examples highlight the needs addressed by the Knowledge Economy, the automation of the repetitive tasks people are forced to endure to live.

The blending of imagination, discovery, and labor offered by the Knowledge Economy creates an opportunity for radical transformation, the complete automation of repetitive tasks within society.   The rise of artificial intelligence as proactive problem-solving machines transcends the capabilities of historical practice. If a task is repeatable, then it is possible to express the action in a formula.  Formulas allow us to encode that action into a machine, freeing us from having to play the role of an imperfect tool in our labors. Humanity is finally at a point in time where we can begin to reconceptualize the entirety of how we work, freeing ourselves from mindless repetition and allowing us to maximize our primary resource, time.  By expanding the horizons of possible directions for our creative potential, we create structures that better support and enhance our freedoms and potential.

To better understand the concept it is important to discuss what the Knowledge Economy is not.  Applying high technology to a hierarchical organization that uses human labor for repetitive work does not constitute a Knowledge Economy organization.  We could use the conglomerate Walmart for example. Walmart has the capital to invest heavily in new practice and procedure, but no amount of technological innovation can act as a substitute for a business model that views employees as cheap, disposable widgets[1].  Walmart lacks the structure to maximize the creative potential of the majority of its staff, instead relying on historical modes of thinking about the organization of labor and tasks within their labor arrangements. Knowledge Economy organizations break from stagnant models of work by combining advanced technologies, education, and procedures to create an environment of practice that pushes the boundaries of what the firm could be.  

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The Power of the Knowledge Economy

One of the most significant reasons that the United States should encourage the development and spread of the Knowledge Economy is the possibility to transcend the limits of diminishing returns.  Diminishing returns means that after a certain point within a production process adding more resources to a vertical within the process begins to produce lower returns per resource unit. To illustrate this point we can imagine adding more workers to an assembly line in a factory setting.  Eventually, companies reach a point where demand is stable, productive capacity reaches full utilization, and every new employee added produces less than the person before them.    Taken to the extreme, we could imagine an example where adding new employees becomes actively detrimental, causing undue stress and complications on the established processes.  A rigid arrangement of a structure with a company will always subject its productivity to diminishing returns.

Organizations embracing Knowledge Economy technologies and techniques draw from every person’s mental capacities in exploring new and undeveloped ideas.  Whereas in the past productive innovation relied heavily on external sources that were irregular in their timing and relevance, today change can integrate with the process of standard operation.    This structure empowers each worker to experiment and create both within existing arrangements as is tradition, and outside of them, challenging the structure of the firm to be better.   Implementing flexible models of structure allows firms to embrace automation of the repetitive tasks, perpetually pushing the boundaries of what is possible within their organization.

Drawing again from Silicon Valley we could take the example of a start-up development firm.  When employees develop successful automation for a task, it disseminates within the organization, forever freeing people from having to do the repetitive work once associated with the function.  Each innovation builds upon the previous while simultaneously drawing inspiration from the not yet known. The totality of their potential limited only by their imagination of the possible.

These examples provide us with a view of the true scope of power the future Knowledge Economy presents us.  A world where collective efforts towards automation of the repetitive are shared across industries to ensure that humanity is never subject to do the work that a machine can do.  It represents a pivotal point in human history that will not only redefine our definition of work, but also our understanding of who we are. Humans are context driven beings; the historical experiences we share in our cultural, political, and economic arrangements shape our perception of the world.  By embracing a world where labor can be radically fulfilling we write a new chapter in the human experience.


[1] The Fight Against Walmart’s Labor Practices Goes Global by Michelle Chen The Nation https://www.thenation.com/article/the-fight-against-walmarts-labor-practices-goes-global/


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