Innovation Management and the Knowledge-Driven Economy

Knowledge is considered as an economic driver in today’s economy, it has become
a commodity that can be packed, bought and sold. This evolution has
been enhanced by by the development of information and communication technologies
(ICTs) that have reduced the cost of gathering and disseminating knowledge.
The contribution of knowledge to innovation has been achieved most notably
by reducing transaction costs between companies and other actors, especially in
areas such as information search and buying.

A knowledge-based economy is defined as an economy directly based on the
production, distribution and use of knowledge. In such economies there is a high
degree of connectivity between the agents involved, and knowledge is widely
used and exploited in all manner of economic activity. We have now progressed
from the knowledge-based economy to the knowledge-driven economy,
emphasising the fact that the current contribution of knowledge is very much as
the dynamo of our economy.

The knowledge-driven economy brings new challenges for business. Markets
are becoming more global with new competitors, product life cycles are shortening,
customers are more demanding and the complexity of technology is increasing.
So while the knowledge economy represents new opportunities, certain
actions are needed to support and take advantage of these developments.

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