This document discusses the knowledge revolution and its implications. It notes seven key elements of the knowledge revolution including increased codification of knowledge, importance of education and lifelong learning, and greater value added from intangible investments. It also discusses two models for enhancing public research - the old model of basic government funding and the new model of linking funding to social and economic objectives. Additionally, it provides data on educational attainment, earnings advantages of education, and factors contributing to labor productivity growth across various countries.
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Open Education and the Open
Knowledge Economy
Michael A. Peters
University of Illinois at Urbana-
Champaign
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The Knowledge Revolution
Seven key elements of “Knowledge Revolution”
Increased codification of knowledge and development
of new technologies
Closer links with science base/increased rate of
innovation/shorter product life cycles
Increased importance of education & up-skilling of labor
force, and life-long learning
Investment in Intangibles (R&D,education, software)
greater than Investments in Fixed Capital in OECD
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The Knowledge Revolution -2
Greater value added now comes from investment in
intangibles such as branding, marketing, distribution,
information management
Innovation and productivity increase more important in
competitiveness & GDP growth
Increased Globalization and Competition
Trade/GDP from 38% in 1990 to 57% in 2001
Value added by TNCs 27% of global GDP
Constant Change and Competition Implies Need for Constant
Restructuring and Upgrading
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Enhancing contributions of public
research
Old model: Funding basic
research
Government funding of
basic research, often
though institutional
funding (i.e., block
grants).
Universities have
autonomy in setting
research objectives
New model: Governing the
science system
Link government funding to
social and economic objectives
Priority-setting
New funding
Universities accountable for
research spending and results
Competitive awards
Evaluation (ex-ante, ex-
post).
Encourage multi-disciplinary
research and links to industry
Centres of excellence
Public/private partnerships
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Baseline qualifications – A world of change Approximated by the percentage of persons
with ISCED 3 qualfication born in the period shown below (2004)
0
10
20
30
40
50
60
70
80
90
100 UnitedStates
CzechRepublic
Switzerland
Germany
Norway
Denmark
Canada
Sweden
Austria
Japan
NewZealand
SlovakRepublic
UnitedKingdom
Finland
Netherlands
Hungary
Luxembourg
Australia
France
Iceland
Belgium
Poland
Ireland
Korea
Greece
Italy
Spain
Turkey
Mexico
Portugal
1940-49 1950-59 1960-69 1970-79
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Growth in university-level qualifications - Approximated by the percentage of persons
with ISCED 5A/6 qualfication born in the period shown below (2004)
0
10
20
30
UnitedStates
Netherlands
Denmark
Norway
Canada
Sweden
Iceland
Australia
Switzerland
UnitedKingdom
Finland
Germany
Japan1
France
Ireland
Spain
NewZealand
Luxembourg
SlovakRepublic
Korea
Greece
Belgium
Mexico
Austria
OECDaverage
EU19average
1940-49 1950-59 1960-69 1970-79
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The earnings advantage of education- Relative earnings of 25-64-year-olds with
income from employment (upper secondary education=100)
60
80
100
120
140
160
180
200
220
240
Australia
Belgium
Canada
CzechRepublic
Denmark
Finland
France
Germany
Hungary
Ireland
Italy
Korea
Luxembourg
Netherlands
NewZealand
Norway
Poland
Spain
Sweden
Switzerland
UnitedKingdom
UnitedStates
OECD
Males below upper sec Females below upper sec.
Males Tertiary-B Females Tertiary-B
Males Tertiary-A Females Tertiary A
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Enhancements in human capital contribute to labour productivity growth
Average annual percentage change (1990-2000)
-2
-1
0
1
2
3
4
5
Ireland
Finland
Sweden
Denmark
Portugal
Australia
UnitedStates
UnitedKingdom
Italy
Norway
Germany
Canada
France
Netherlands
NewZealand
Hours worked Level of education
Hourly GDP per efficient unit of labour Labour productivity
