What is the 'Knowledge Economy'? Knowledge Intensity and Distributed Knowledge Bases

In recent years public policies for science, technology and innovation have attracted increased attention as a result of claims that knowledge-intensive industries are now at the core of growth, and that we are now entering a completely new form of 'knowledge society'. The objectives of this paper are firstly to examine what various authors mean by the concept of a knowledge economy or learning economy; secondly to describe quantitatively the creation and use of knowledge across industries; thirdly to develop an approach to understanding the knowledge intensity of mature, 'traditional' or low-technology industries. In exploring this issue, the paper first uses Community Innovation Survey data to describe some empirical dimensions of knowledge creation in Europe. It shows that knowledge investments are economy wide, not confined to high-tech sectors, and not confined to R&D. The paper then turns to concepts and a methodology for mapping the knowledge base of an economic activity. The aim is to generate a more nuanced understanding of the meaning of 'knowledge intensity' in production. The approach rests on what the paper terms 'distributed knowledge bases' that have a systemic and institutionally diffuse location. Knowledge for many key activities is distributed among agents, institutions and knowledge fields, and the problem is to understand the embodied and disembodied knowledge flows between them. An empirical example of such knowledge bases is described, for the food processing industry. The paper concludes by discussing how such 'distributed knowledge bases' might affect our conceptions of the knowledge economy and suggests links to current policy challenges in both developed and developing economies