knowledge economy

The global economy has now become more complex than ever. And economists from all over the world agree upon the fact that the structure of economy is changing as technology rises as the biggest determining factor of fluctuations in world finance.

Half a century ago, the economy was significantly different. Society transitioned from agriculture economy where land was the main fuel of the economy, to industrial economy where oil and gas were the main fuels of that economy.

This is why powerful companies were mining fuel resources and countries with these natural resources were the most prosperous. Also, some of the highest profit generating companies in the world included a petroleum company, Shell Inc which employed over a 100,000 people and generated a total networth of USD 1.8 Billion by the end of 2015. But a startling shift was noted when the gaming industry generated a total of USD 2.4 Billion in just 3 months into 2016 and the number of staff they had to employ were less than 500! This marked the transition of our economy from industrial economy to knowledge-based economy. Now the most powerful countries are mining data instead of oil, and companies harvest apps instead of crops.

So one might ask, what is knowledge economy?

According to Wikipedia "The knowledge economy is the use of knowledge to generate tangible and intangible values." This requires the use of knowledge and data to operate machines and AI softwares. And these softwares, devices and technologies then generate economic value and increase the overall living experience of people living in a society.

We live in the Information age that is led by innovation and to successfully adapt to this changing society, countries need to remold areas such as trade, finance and education. The industrial economy thrived because changes were made to adapt to it. The problem a lot of people face today is that the education system is still based on the industrial model. The industrial industry education was based on a one-size-fits-all concept and everyone received the same knowledge which was designed to make them productive labour workers. And this model worked well for a long time, but as the society changes and the main fuel of society becomes knowledge instead of oil, it is high time some radical changes be made in the education system.

Knowledge is the catalyst and connective tissue in the Information Age and it demands that each member of the society is trained to acquire knowledge and use it in creative solutions. The two most important foundations of this economy are the companies engrossed in research and the people who know how to apply this knowledge - the programmers. This is the reason why educators have been stressing on the need to make coding a compulsory subject in schools for kids aged 5 - 19 years old. Consequently, countries like Estonia have already implemented this, and their education system is producing programmers, solution providers and most importantly knowledge workers who meet the demands of this economy.

The key component of a knowledge economy is a greater reliance on intellectual capabilities than on physical inputs or natural resources. This is why the future workers need to be equipped with logical and computational thinking skills, so they become the problem solvers and solution providers of tomorrow. The right kind of education will create knowledge workers instead of labourers who can easily be replaced by apps and devices.