The knowledge economy is one of the systems in which goods and services production depends upon the knowledge-based activities within a particular country. It may refer to some ground-breaking innovations, ideas, and practices that have been brought to use, development models and processes, and different use of natural resources using other techniques.
The knowledge economy focuses on developing skills for a particular country’s demographic and is considered one of the essential components of the post-industrial economy. Governments around the world today focus more on 21st-century skills and the development of an information-based digital economy that facilitates business around the world in a more convenient manner. In this manner, everything is accessible to everyone based on knowledge, and there is no business in the entire system.
The knowledge-based economy can differ for different countries depending on their demands and what they perceive knowledge to be. According to the UNCSTAD/ United Nations Commission on Science and Technology for Development, developing countries need to blend the correct mixture of sustainable development and ICT (Information and Communications Technology) to participate in the knowledge economy.
A knowledge economy heavily depends upon good communication skills, innovation incentivising models research, entrepreneurship-based studies, development of intellectual property rights, etc. An excellent human capital well versed in education from its initial ages can also help develop a sound knowledge economy.