The concept of a knowledge-based economy has emerged as an influential constituent of the economy building in any developed modern world state. With their rapid advancement, technology and innovation are entering different fields of economy, from human resources to strategic decision-making, thus becoming a significant part of the business process. The knowledge-based economy is currently being actively addressed in the academic and professional literature that considers its perspectives, advantages, and ways of improvement.
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Information and knowledge are decisive for economic growth in the modern world. The processes of globalization and technological revolution made their impact on the economic growth direction (Hadad 2017).
Being introduced to the field at the beginning of the1990s, the knowledge-based economies are “economic development model” that is based on four main elements: the institutional framework for economic development, highly educated employees, innovation, and “dynamic information infrastructure” (Barkhordari, Fattahi & Azimi 2018, p. 1). The main principles of the knowledge based economy are incorporate in different levels of business organizations, including big enterprises and small and medium-size businesses that actively utilize learning as a competing strategy (Mejri, MacVaugh & Tsagdis 2018).
Therefore, it is vital to include the learning of this business model to educational fields to amplify the implementation of the approach to the majority of economic organizations (Abdulwahed 2017). Active discussion of the importance of the knowledge-based model of economic development is related to the emergence of influential results in certain successful economies, among which the UAE is one of the best examples.
The success of the knowledge-based approach implementation depends on many factors that need improvement in the nearest future. Even the most progressive economies may face difficulties in this field. The UAE economy that demonstrates leading results in its business projects’projects’ completion still experiences technological readiness issues (Alfaki & Ahmed 2017). According to Al-Mubarak and Busler, the essential criteria needed for successful implementation of the approach is an innovation, which is “the process of making change, difference, and novelty in the products, services, add value, and business practices” to foster economic growth and profit (2017, p. 2).
The importance of innovation in knowledge-based economies is also addressed by Hadad (2017), Jansen, Steenbakkers, and Jagers (2017), North and Kumta (2018), and others. Thus, due to its rapid advancement, it is vital to track the directions of technology growth to be competitive in their markets.
In addition to innovation, the scholars emphasize the acute importance of high-technology industries investment and highly educated workers for state economy development (Hadad 2017). Indeed, the competition between enterprises in the modern economy resembles the competition between the skills of employees of different companies who implement their education and skill levels to the priorities of a company. According to Gupta, “every additional person with effective skills and competencies means additional profit” for an enterprise, thus contributing to the growth of a state economy (2017, p. 16).
As an example of such skills prioritization, it is possible to mention the UAE’sUAE’s attraction of highly-skilled professionals to participate in their leading enterprises (Alfaki & Ahmed 2017). Therefore, competent workers and highly-educated leaders may contribute to the well-being of the economy as a whole.
The success of any competitive enterprise lies in its ability to make strategically correct decisions and finding good solutions in the circumstances of difficulty or change. The framework of the knowledge economy provides all tools for business leaders to implement a decision-making procedure most effectively (Barao et al. 2017). With the emergence of knowledge orientation in business, “more skilled jobs are required, roles become more specialized, and decision-making needs to be delegated” (North & Kumta 2018, p. 219). The education and knowledge prioritization makes the duty delegation possible.
Thus, the knowledge-based economy is the leading model in contemporary business across the world. Enterprises implement innovation and technology, as well as the attraction of highly-educated and skilled staff to be able to compete with rapidly developing competitors in the market. The leading economies, one of which is the UAE, show profound results in the utilization of the approach. However, the literature review shows the need for a deeper investigation of the possible ways of fostering the innovation readiness of the enterprises to meet the requirements of the time.
Abdulwahed, M 2017, ”Technology innovation and engineering’engineering’ education and entrepreneurship (TIEE) in engineering schools: a novel model for elevating national knowledge-based economy and sustainable socio-economic development,” Sustainability, vol. 9, no. 2, pp. 1-21.
Alfa, I & Ahmed, A 2017, From oil to knowledge: transforming the United Arab Emirates into a knowledge-based economy, Routledge, New York.
Al-Mubarak, HM & Busler, M 2017, ”Challenges and opportunities of innovation and incubators as a tool for a knowledge-based economy,” Journal of Innovation and Entrepreneurship, vol.6, no.15, pp. 1-18.
Barao, A, De Vasconcelos, JB, Rocha, A & Pereira, R 2017, ”A knowledge management approach to capture organizational learning networks,” International Journal of Information Management, vol. 37, no. 6, pp. 735-740.
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Barkhordari, S, Fattahi, M & Azimi, NA 2018, ”The impact of knowledge-based economy on growth performance: evidence from MENA countries countries’, Journal of the Knowledge Economy, pp 1–15.
Gupta, S 2017, ”Knowledge economy: a need for social reformation,” Journal of Management Science, Operations & Strategies, vol. 1, no. 1, pp.16-20.
Hadad, C 2017, ”Knowledge economy: characteristics and dimensions,” Management Dynamics in the Knowledge Economy, vol.5, no.2, pp.203-225.
Jansen, W, Steenbakkers, W & Jagers, H 2017, New Business Models for the Knowledge Economy, Routledge, New York.
Mejri, K, MacVaugh, JA & Tsagdis, D 2018, ”Knowledge configurations of small and medium-sized knowledge-intensive firms in a developing economy: a knowledge-based view of business-to-business internationalization,” International Marketing Management, vol. 71, pp. 160-170.
North, K & Kumta, G 2018, Knowledge management: value creation through organizational learning, 2nd edn, Springer, Switzerland.