The Knowledge Economy And Sustainable Economic Growth

Knowledge has become the major driving force of economic and social development all around the world. Coupled with globalization and accelerated by rapid distribution and transfer of knowledge by information and telecommunication technologies, this development impacts all countries and regions, public institutions, the corporate world, and the lives and prospects of individuals. The knowledge economy is based on the generation and adoption of new knowledge created by scientific research and technological advances; investments in education and research; adoption of best practices; and openness to social, economic, and cultural innovations. For advanced industrialized countries with high labor and infrastructure costs, the knowledge economy offers competitive advantages in high-technology product manufacture and efficient service sectors. For natural resource-based economies it offers improved technologies and higher-value added products with closer customer linkages, as well as a path for sustainable development. For developing countries, knowledge offers possibilities to short cut development phases, leapfrog technologies, and more quickly integrate into the global economy by becoming more attractive to international investors. The generation and conversion of knowledge into economic and social benefits requires good innovation systems, including highly qualified personnel and efficient technology transfer (TT) and venture capital (as a gen- erator of innovation). Higher levels of knowledge in a society tend to lead to higher levels of economic growth and consequently to higher levels of economic development.