Box 9.1 The Knowledge Economy
Knowledge is replacing matter and energy as the primary generator of wealth.
—Thomas Stewart, Board of Editors, Fortune
Today, knowledge and skills stand alone as the only source of comparative advantage.
—Lester C. Thurow, The Future of Capitalism
Tomorrow's economy will revolve around innovatively assembled brain power, not muscle power.
—Tom Peters, The Tom Peters Seminar
line of Box 9.2, which says that the future has already turned into the present. Despite the fact that economists disagree on the pace of this transformation there is absolutely no argument about the fact that this transformation will have profound implications for all aspects of the world economy, the political scene, our individual personal and social behaviors, the environment, and the business environment.
There is, in fact, some concrete evidence that the knowledge era is already here. Some of that evidence is provided by both U.S. and global economic statistics. One of my favorites is this quotation from Thomas Stewart, Board of Editors of Fortune:
1991 was the crossover year when capital spending by U.S. companies was greater on telecommunications, copying and computer equipment than on industrial, construction, mining, and farming equipment.
We tend to think of the mid-1990s as the transition point, but we actually made this shift, from a macroeconomic perspective, around 1991.
Computing and telecommunications play very interesting roles with respect to this transition. After 25 years in the era of the computer, those roles are causing or catalyzing the transition from the industrial to the knowledge economy. In addition, computing and communications are also fundamental catalysts for the pace at which this transition is occurring. Unlike earlier transformations, the presence of and the advances within computing and telecommunications are, themselves, radically changing the pace of this transformation.
I recently had an opportunity to speak at an Massachusetts Institute of Technology faculty seminar series on this topic. I represented that one of the most intractable—but terribly interesting and incredibly important—problems we face right now is how to get a better handle on the pace of the transition from the industrial economy to the knowledge economy and of what it might look like. This is important for the following reason.