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The Knowledge Based Economy Implications for Vocational
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The Evolving Concept of the Knowledge Based Economy. There is no universally accepted definition of the knowledge based economy As a. concept it is very loosely employed and embraces a number of quite different visions of. the economy and society, One view most evident in OECD publications sees it as very much bound up with. the high skills high performance high value added scenario as the only way for. firms to compete in a globalised economy, Another view found principally in the scientific and technical community tends to. view it more narrowly as applying to knowledge intensive industries where. knowledge itself is the core competence The latter is typically found in software. and internet companies computer hardware and chip manufacturers computer. and electronic equipment sectors and health care technology1. A third view the one adopted in this paper is that all sectors of industry are. becoming more knowledge intensive in the very broad sense of that term. Knowledge is seen as a potential generator of productivity improvements in areas. as diverse as quality customer service variety speed and technical. improvement as well as innovation in products processes and organisational. structure and behaviour As companies alter the way their organisations are. structured flatter non hierarchical team based multi skilled in order to compete. more effectively so too workers have needed to obtain a more complex range of. cognitive and intellectual resources, This research project seeks to extend our understanding of the impact of the knowledge. based economy on the content of work and training It does this by acknowledging. multiple perspectives on how economies grow and by embracing new definitions of. skills knowledge and training that reflect recent research In this project a knowledge. based economy is defined as one that is increasingly dependent for its growth on the. input of knowledge as a value added input to the economic system This is reflected in a. change in the basis of competitiveness for economies organisations and individuals. This is realised in four interrelated ways, First such economies experience a changing structure exemplified by new. industries occupations and organisational arrangements. Second there is a change in the types of skills required with a rise in the. importance of generic skills including the ability of individuals to work more. autonomously be self managing work as part of flexible teams adapt to change. solve complex problems think creatively and engage with innovation as a. continuous process, Third the economy requires new forms of knowledge and places increased.
importance on the creation and application of knowledge in networks or clusters. of companies enterprises and within communities of practice where workers. are required to work together in new and more complex ways. For example refer June 1999 issue of Business Higher Education Round Table newsletter on The. Knowledge Economy, The Knowledge based Economy Implications for VET Page 2. Fourth innovation becomes more important as a means to increase economic. competitiveness and knowledge management becomes increasingly the key to. sustainable competitive advantage requiring individuals firms regions and indeed. complete economies to acquire create and use knowledge as the key productive. Since the 1960s there has been a growing awareness of the decline of the importance. of the control of resources for wealth creation the emerging dominance of specialist. knowledge and competencies as well as the management of organisational. competencies and knowledge, In Post capitalist Society 1993 Drucker argued that in the eighteenth century the basis. for economic development was machines and factories and new industrial technologies. This knowledge was applied to tools processes and products The early part of this. century was marked by the development of new forms of knowledge characterised by. systems of embedded knowledge applied to human work This was the knowledge of. systematic routines In the late 20th century new forms of knowledge are now becoming. necessary and specialised knowledge workers are growing in number These workers. are unlike previous generations of workers not only in their high levels of education but. because for the first time they own the organisation s means of production knowledge. Drucker has further suggested that as a result traditional ways of thinking about. organisational structures need to be discarded In their place new ways are needed to. view and construct organisations based around specialised workers team based work. flat management structures and flexible practices, The stability of traditional production systems product markets company structures and. corporate relationships have been shaken by the fast rate of technological change. Technological innovation and access to knowledge and skills are more than ever key. drivers of innovation and their application has become central to the competitive strategy. As Kanter 1995 has pointed out future success will come to companies that can meet. global standards and tap into global networks Similarly the cities and regions that will be. most successful in the 21st century will be those that are best at linking businesses to the. global economy Hobday 1995 has pointed out that technological innovation has played. a significant role in the economic transformation of many Asian countries Entire. industries and geographical regions can be invigorated by technological change It has. been estimated by Cooper 1993 that new products less than five years old account for. 52 of sales and 46 of profits for US firms At all levels it appears that. competitiveness depends on technological innovation. In summary in advanced economies in the last two decades there has been growing. recognition of the need for workers who can function with new forms of knowledge. rather than low skilled workers who can function only with routinised knowledge. Two different paradigms exist for understanding knowledge and skill They both have. implications for how the relationship of individuals enterprises and networks of. enterprises to the knowledge economy is viewed One paradigm is based on an. understanding of knowledge and skill as dependent on conceptual skills and cognitive. abilities primarily of individuals The second and emergent paradigm suggests that the. appropriate unit of analysis is neither individuals not organisations but socially. distributed activity systems That is to say knowledge is not something that resides in. the heads of individuals Knowing is mediated through systems of language. technology collaboration and control it is situated in time and space and particular. The Knowledge based Economy Implications for VET Page 3. contexts it is provisional constructed and constantly developing and it is pragmatic. purposive object oriented Blackler 1995, Rather than studying knowledge as something individuals or organisations supposedly. have these new theories and approaches study knowing as something that they do. and analyse the dynamics of the systems through which knowing is accomplished The. learning theories that inform this work are activity theories Engerstrom 1994 and social. learning theories Lave and Wenger 1991 Vygotsky 1978. The distinction is critically important for VET, one paradigm implies business as usual with its focus on individuals and the role.
of VET in upskilling individuals, the other directs attention towards networks or clusters of. companies enterprises or communities of practice that is people who need to. work together in some way but who may be distributed through an organisation. or in different organisations and implies a need to reconceptualise the role of. Cairney 2000 has suggested that regions seeking to compete more effectively within a. world economy will need to develop soft structures that support knowledge creation. and learning and that enable firms to collectively strengthen a region s capacity for. knowledge creation and innovation Key institutions such as universities VET providers. regional development organisations and business chambers are amongst the most. important institutions within regions Such organisations act as key knowledge creators. and trainers as well as a means to collect relevant knowledge in the international domain. and vehicles for communicating this effectively through a variety of mechanisms and. relationships, The concept of the learning region has emerged to describe those places that offer an. institutional environment that encourages both private and social learning at four different. scales the individual workers the individual firm groups or clusters of related firms and. government bodies Learning regions are less dependent on the individual excellence of. their educational institutions as they are on the extent to which their key institutions. organisations and industry are able to trade support and jointly create knowledge and. knowledge networks The success of key regions throughout the world has been due in. no small measure to social or collective learning processes in which the role of the. region is to animate the formation of interaction relationships between individual firms. and between firms and other regional institutions Such regional organisations should. also be thought of as learning organisations themselves in that they actively seek to. emulate and learn from successful experiences of counterpart agencies in other regions. and nations, Marceau et al 1997 have argued that a learning economy is both knowledge and. innovation intensive and is usually technology driven Regions that will make economic. progress are those that have high rates of innovation and learning that are greater than. those of their competitors are Growth in real terms will be produced by activities based. on knowledge generation through investment infrastructure human capital innovation. research and development and advanced training, Recent writing and policy pronouncements on the knowledge based economy emphasise. its potential application to all businesses in all sectors It has become accepted wisdom. The Knowledge based Economy Implications for VET Page 4. that firms must incorporate knowledge management into their core business strategy to. ensure they remain competitive Knowledge is seen as a potential generator of. productivity improvements through innovation and creativity across the board whether. in relation to product quality customer service variety speed or technical improvements. e g see Neef 1998, The movement towards enhanced importance for knowledge as a driver of economic.
growth is widely seen as a response to the processes of globalisation technological. change and the intensification of international competition Official thinking by OECD as. well as governments of industrialised nations posits knowledge as the main driver of. growth wealth creation and employment OECD 1996 DISR 1999 DfEE 2000 with. learning skills enhancement innovation and enterprise as the cornerstones of the new. economy The phrase knowledge based economy has become shorthand for the. emerging set of economic activities structures and arrangements that are the result of. these global processes, Some view the knowledge economy as synonymous with the shift into a new high skills. high performance mode of working reflecting a belief in a workplace change led. response to global pressures This shift in thinking requires both changes in work. organisation as well as more workers to whom high levels of discretion have been. delegated in order to produce high specification customised goods and services. Current thinking is that the skill profile needs of a high performance work organisation can. no longer be served by skills needs derived from traditional conceptions of work The. skill requirements of emerging technology and innovative work organisation require a. new combination of content skills process skills cross functional skills social skills self. managing skills and complex problem solving skills. A variant on this view holds that the knowledge economy is not so much concerned with. higher skills as with the needs of business enterprises for a broad range of general. aptitudes abilities and skills that can be applied to the increasingly cognitive demands of. jobs and the new ways of thinking and managing In this modern economy all workers. will need to become lifelong learners A widely held belief is that they will need the. intellectual resources to be self managing to engage in continuous learning and to master. new skills and behaviours in order to meet the ever changing needs of more dynamic. product and labour markets Drucker 1999 For Brophy 1998 everyone in the. workplace can be creative it need not be the preserve of the few Hopkins and Maglen. 1999 echo this optimistic vision of the knowledge based economy and the opportunities. and benefits it offers to successful lifelong learners of the future. These diverse understandings of the defining characteristics of the knowledge based. economy can be summarised as, new industries and organisational structures which are heavily dependent on. changing occupations and skill structures which privilege particular kinds of. knowledge production ie knowledge workers, highly intensive workplaces requiring a range of new forms of knowledge and. The Knowledge based Economy Implications for VET Page 3 Fourth innovation becomes more important as a means to increase

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