Knowledge Society and the Knowledge Gap1

1 Knowledge Society and the Knowledge Gap Hans-Dieter Evers Dept. of Southeast Asian Studies University of Bonn, Germany Abstract Knowledge has been widely recognised by economists as the most important factor of production in a “new economy”. The production and utilisation of knowledge is therefore essential for development. Some countries, Malaysia among others, have embarked on an ambitious plan to use knowledge as a base for economic development, by-passing earlier stages of industrialisation. Some commentators have, in contrast, asserted “that it is doubtful that the knowledge revolution will let developing countries leapfrog to higher levels of development” as “the knowledge economy will actually expand the gap between rich and poor” (Avinash Persaud in Foreign Affairs 80, 2, 2001:108). The paper will discuss this controversy by showing that the development of a knowledge society and an epistemic culture is a precondition for knowledge-based economic growth. Socio-economic indicators will be used to investigate whether or not the existing knowledge gap is widening between Southeast Asia and the OECD countries. Factors explaining the situation will be outlined. Contents 1. Defining the Knowledge Gap (K-Gap) ..............................................................................2 2. A Counter-Thesis................................................................................................................3 2.1. The Widening K-Gap .................................................................................................3 2.2. The Construction of the K-Gap ..................................................................................5 2.3. Value-Added: The Knowledge Market......................................................................6 2.4. Culture and Development: The Knowledge Gap as an Issue of Development ..........8 3. The K-Gap in Southeast Asia .............................................................................................9 3.1. Constructing a K-Gap for Asian and European Countries .........................................9 3.2. Knowledge Society Indicators....................................................................................9 4. Conclusion........................................................................................................................14 5. References ........................................................................................................................15 1 Paper read at an International Conference, “Globalisation, Culture and Inequalities”, in honour of the work of the late Professor Ishak Shari, 19–21 August 2002, University Kebansaan Malaysia 2 Knowledge Society and the Knowledge Gap 1. Defining the Knowledge Gap (K-Gap) Since the World Bank published the 1998/99 World Development Report on Knowledge and Development (World Bank 1999), narrowing the knowledge gap between and within countries has become a prime target of international development agencies as well as of some national governments. The World Bank report distinguishes two types of knowledge: knowledge about attributes leading to information problems and knowledge about technology (i.e. know-how), including knowledge gaps. “Typically, developing countries have less of this know-how than industrial countries, and the poor have less than the non-poor. We call these unequal distributions across and within countries knowledge gaps” (World Bank 1999). The international knowledge gap is thus defined in terms of the knowledge achieved in the OECD countries, in particular the USA. The meaning of knowledge is never clearly defined, but from the discussion on the k- gap we can deduce that education, expenditure for research and development and ICT infrastructure are seen as the crucial variables. “The debate about the welfare implications of the information revolution for developing countries has given rise to diametrically opposed views. Some believe that information and communication technologies (ICT) can be mechanisms enabling developing countries to ‘leapfrog’ stages of development. Others see the emerging global information infrastructure as contributing to even wider economic divergence between developing and industrialized countries”2 (Braga 1998). In any case, closing the k-gap is regarded as a necessary step towards economic development. Knowledge is the most important factor of production and its growth is essential to propel a country into self-sustained growth. Development agencies have been the most outspoken proponents of the gap-closing strategy. World Bank President James Wolfensohn, 2 http://www.unesco.org/courier/1998_12/uk/dossier/txt21.htm. This is an article by Carlos Braga, The World Bank. It appeared in the December 98 issue of the UNESCO Courier. 3 commenting on a massive study “Voices of the Poor”, has again emphasized this view with the following words: “Poor people know as well as anybody else that what keeps them poor is lack of competitiveness and lack of knowledge” (in the Far Eastern Economic Review, June 27). Whenever a point of view is authorized by the World Bank, it advances to the status of an ultimate truth. But exactly at this stage we should sit back, take a closer look and re-think and re-search the issue at hand. Can and should a knowledge gap be closed to achieve development? 2. A Counter-Thesis For the sake of argument I should like to propose a counter-hypothesis, which runs as follows: 1. The k-gap is widening with the growth of a k-based economy and 2. the existence of a k-gap is a pre-condition for economic growth and development. First we shall examine some evidence to investigate whether or not the advance of ITC has reduced the k-gap and secondly we shall analyse the k-gap itself. 2.1. The Widening K-Gap Knowledge gaps occur 1. between nations or groups of nations, 2. between regions, classes or communities within nations. A k-gap denotes a significant difference between indicators, measuring the properties of knowledge societies. These indicators measure usually averages of IT infrastructure, human resources development, investments in research and development (R&D), and related fields. Indicators just “indicate” much more complex structures and institutions and have therefore to be supplemented by qualitative, analytically descriptive data. Optimistic commentators argue that the fast expansion of ICT (information and communication technology) has improved the access to knowledge. Especially the spread of personal computers and the internet has connected millions of people to the knowledge 4 resources of the world-wide-web. In Malaysia e.g. the number of computers has risen from 37,3 per thousand people in 1995 to 103,1 in the year 20003 and the number of internet users has risen from 40 thousand to 3,7 million in the same period. As the late Professor Ishak Shari has argued, general development policies implemented under the New Economic Policy have had a major impact on reducing income inequality in Malaysia from the late 1970s. However, since 1990 there is a trend towards rising income inequality, both overall and with inter-ethnic as well as urban-rural income disparities. He suggested that the government policy reversal towards liberalization, deregulation and privatization since the late 1980s has contributed to this trend of increasing inequality” (Ishak 2000). More and more people gain access to global knowledge resources and a fair proportion is probably making use of them. Comparing countries critical commentators are, however, not convinced that “the knowledge revolution will let developing countries leapfrog to higher levels of development…. In fact, the knowledge gap is likely to widen the disparities between rich and poor, imprisoning many developing countries in relative poverty” (Persaud 2001) . It is equally uncertain that the new knowledge technologies will bolster democracy just on the basis of better access to information and improved knowledge of political issues. The k-gap is widening, because some regions within countries develop faster than others and some countries are on a faster track towards a knowledge society than the less endowed. There are several arguments to back up this view: 1. When it became apparent that knowledge is the major factor of production, rich countries, the US in particular, have broadened protection of intellectual property rights, especially patents. Late-comers in the race towards a k-economy are barred from using essential knowledge or have to pay a high price for its use. In fact, “the knowledge-intensive and militarily strong developed nations have been exploiting their power to promote their economic interests beyond free-market outcomes” (Persaud 2001). The so-called “US-led war on terror” has increased this tendency. 2. Big multinational corporations have absorbed local knowledge, especially in the field of medical plants. The resulting products are patented and sold, thus devaluating local 3 For comparison: in the whole region (East Asia and the Pacific) the ratio was 21,7 people in 2000, putting Malaysia far above the average. Source: Development Data Group, World Bank. 5 knowledge in developing countries. Big development agencies, among others the German GTZ, are packaging the knowledge gained in development cooperation into products that will then be sold to customers, mainly governments and international development agencies. There are no provisions to share proceeds with local experts or countries in which the experience was gained, that forms the

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