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New Indicators For The Knowledge Based Economy

Objective

The objective of this project is developing indicators for assessing the significance of changes in the knowledge-base underlying economic, industrial and firm performance. We aim to provide means to connect knowledge-based indicators to indicators of performance in order to draw policy relevant conclusions about the nature and extent of knowledge-based developments on economic performance.

This project will develop new knowledge-related indicators of economic activity to assess:
the accumulation of intangible capital across European economies;
the emergence of the new "information infrastructure" of electronic commerce;
the changing structure of the knowledge-base of firms.

The research centres involved will play an active role in creating and implementing a specific plan for the broad dissemination of the results to two types of audience:
the policymaking community, who will be primarily interested in what the indicators suggest about the sources of performance;
and the statistical community, who will be primarily interested in the methodological issues underlying the derivation of the specific indicators of this study.

Work description:
In recent years, economists and scholars of business studies have re-emphasised the specific role of knowledge as a factor influencing competitiveness in industrialised economies. The emphasis on knowledge poses a difficult challenge for statistical offices and policymakers who rely upon traditional input and output measures to chart the course of the economy, as these measures may no longer adequately capture the health of economies.

This project will address the two most central questions about knowledge-based economies:
(1) which measures of knowledge are most relevant and;
(2) what the changing levels of particular measures may indicate about the progress or health of an economy.
The approach we have chosen is exploratory rather than comprehensive. We do not believe that there is sufficient basis at present for either settling on a single methodology or focussing on a single level (macro, midi or micro) in the effort to derive relevant measures. At the macro-level, labour force skills and education facilitate the creation and absorption of new knowledge.

We will focus on indicators of the accumulation of intangible capital across five main European economies including a representative collection of sectors within each economy. At the industrial-level, knowledge is created, deployed and refined for specific purposes that increasingly involve the creation of supplier and distribution networks using systems based upon ICTs.
We will develop indicators of the emergence of the new "information infrastructure" of electronic commerce that can be applied at both the firm and the midi or industry level. At the micro or firm-level, specialisation and competitive differentiation of knowledge create the basis for profitability, employment, and growth.
We will develop firm-level indicators of the changing structure of the knowledge base in two sectors based upon the connection between patents and scientific literature (pharmaceuticals and tyres), as well as in a third sector (life insurance) which does not perform formal R&D activity, but which nonetheless is a major user of knowledge.
Finally, we will develop indicators relevant for assessing the relative performance of nations, industries, and firms that may be used to assess the explanatory power of the knowledge-based indicators.

Milestones:
The project will provide more solid ground to policy-makers by developing and analysing knowledge-related indicators at macro, midi and micro level. These indicators will be related to traditional and innovative performance indicators.
The theoretical, empirical and methodological insights of the analysis will be discussed in two workshops.
An original, comprehensive data set of indicators of knowledge-bases will be designed and made available for further research.
An edited book will stimulate interest about the issues raised by the emergence of knowledge-based economies.

Coordinator

THE UNIVERSITY OF SUSSEX
Address
Sussex House Falmer
BN1 9RH Falmer, Brighton, East Sussex
United Kingdom

Participants (2)

OBSERVATOIRE DES SCIENCES ET DES TECHNIQUES
France
Address
93, Rue De Vaugirard
75006 Paris
UNIVERSITEIT MAASTRICHT
Netherlands
Address

6200 MD Maastricht