MERIT-Infonomics Research Memorandum series

AN INTRODUCTION TO THE ECONOMY OF THE KNOWLEDGE SOCIETY

Paul A. David Dominique Foray

2001-041

December 2001

MERIT – Maastricht Economic Research International Institute of Infonomics Institute on Innovation and Technology PO Box 616 PO Box 2606 6200 MD Maastricht 6401 DC Heerlen The Netherlands The Netherlands T: +31 43 3883875 T: +31 45 5707690 F: +31 43 3884905 F: +31 45 5706262 http://meritbbs.unimaas.nl http://www.infonomics.nl e-mail:[email protected] e-mail: [email protected]

An Introduction to the Economy of the Knowledge Society

By

Paul A. David and Dominique Foray

First English draft: 13 September 2001 This version: 5 December 2001

This article elaborates upon the authors’ introduction to the Special issue of the UNESCO International Social Science Journal, n°171, on “The Knowledge Society,” prepared under the guest-editorship of Dominique Foray, forthcoming from Basil Blackwell Ltd. in March 2002

Acknowledgements

P. A. David gratefully acknowledges the support that his work on this paper received under a grant from the Dutch Ministry of Economic Affairs to the International Institute on Infonomics for its IRIS Project, on Intellectual Property Rights in the Information Society. D. Foray expresses his appreciation of the supportive research environment of CERI/OECD, without implicating the latter organization in the views presented herein.

Contact Author: Prof. P. A. David, All Souls College, Oxford, OX1 4AL, U.K. Tel: 44+(0)1865+279313; Fax: 44+(0)1865+279299; E-mail: paul.david@economics.ox.ac.uk, [email protected]

An introduction to the economy of the knowledge society

Paul A. David and Dominique Foray

Abstract

This introductory article reviews the main themes relating to the development of new knowledge-based economies. After placing their emergence in historical perspective and proposing a theoretical framework which distinguishes knowledge from information, the authors characterize the specific nature of such economies. They go on to deal with some of the major issues concerning the new skills and abilities required for integration into the knowledge-based economy; the new geography that is taking shape (where physical distance ceases to be such an influential constraint); the conditions governing access to both information and knowledge, not least for developing countries; the uneven development of scientific, technological (including organizational) knowledge across different sectors of activity; problems concerning intellectual property rights and the privatization of knowledge; and the issues of trust, memory and the fragmentation of knowledge.

Biographical Notes

Paul A. David is Professor of Economics, and Senior Fellow of the Stanford Institute for Economic Policy Research at Stanford University; he also is Senior Research Fellow of All Souls College, and Professor of Economics and Economic History in the University of Oxford. David is internationally recognized for his contributions to American economic history and the economics of science and technology, fields in which he has authored over 120 articles and contributions to books. Email: [email protected]; [email protected]

Dominique Foray is a Director of Research at CNRS and Professor at the Institut pour le Management de la Recherche et de l’Innovation at Paris-Dauphine University. His work focuses on the characteristics and performance of knowledge-based economies. Email: [email protected]

An introduction to the economy of the knowledge society Paul A. David and Dominique Foray

valuable asset. As members of these 1. Historical perspective communities develop their collective expertise, they become agents of change for Knowledge has been at the heart of economic the economy as a whole (see section 3). growth and the gradual rise in levels of social well-being since time immemorial 1. The ability to 1.2 The rise of intangible capital at invent and innovate, that is to create new macroeconomic level knowledge and new ideas that are then embodied in products, processes and organizations, has Economic historians point out that nowadays always served to fuel development. And there have always been organizations and institutions disparities in the productivity and growth of capable of creating and disseminating knowledge: different countries have far less to do with from the medieval guilds through to the large their abundance (or lack) of natural resources business corporations of the early twentieth than with the capacity to improve the quality century, from the Cistercian abbeys to the royal of human capital and factors of production: academies of science that began to emerge in the in other words, to create new knowledge and seventeenth century. “Knowledge-based ideas and incorporate them in equipment and economy”, however, is a recently coined term. As people. such, its use is meant to signify a change form the economies of earlier periods, more a A related characteristic of economic growth, "sea-change" than a sharp discontinuity. This that became increasingly evident from the transformation can be analysed at a number of different levels. early twentieth century onwards, is the growing relative importance of intangible 1.1 The acceleration of knowledge capital in total productive wealth, and the production rising relative share of GDP attributable to intangible capital (Abramovitz and David, The crux of the issue lies in the accelerating 1996; Abramovitz and David, 2000). (and unprecedented) speed at which Intangible capital largely falls into two main knowledge is created, accumulated and, most categories: on the one hand, investment probably, depreciates in terms of economic geared to the production and dissemination relevance and value. This trend has reflected, of knowledge (i.e. in training, education, inter alia, an intensified pace of scientific and R&D, information and coordination); on the technological progress. It has a host of other, investment geared to sustaining the ramifications and gives rise to many new physical state of human capital (health challenges (see sections 5 and 6). But the expenditure). In the United States, the discontinuity is not equally pronounced in current value of the stock of intangible capital every sector (see section 5.2). A new kind of (devoted to knowledge creation and human organization is spearheading the capital) began to outweigh that of tangible phenomenon: knowledge-based capital (physical infrastructure and communities, i.e. networks of individuals equipment, inventories, natural resources) at striving, first and foremost, to produce and the end of the 1960s. circulate new knowledge and working for different, even rival, organizations. One sign Recent work by OECD has helped produce that a knowledge-based economy is stable categories of knowledge-related developing can be seen when such investment for given countries or sectors. individuals penetrate conventional Taking the simple yet highly restrictive organizations to which their continuing measure of investment in research and attachment to an “external” development, public education and software, knowledge-based community represents a one can see that annual investment rates have grown strongly since the 1980s (at an average

- 2 - annual rate of 3% in the OECD countries). Significantly increasing investment in Investment structures, however, differ from innovation (not least in R&D) has sent the one country to the next: Scandinavian numbers of innovations appearing soaring, as countries, for instance, spend more on public evidenced not only by the volume of patents education, while industrial investment requested and approved (OECD, 1999), but (private-sector R&D, software and also by the proliferation of new varieties of information technology equipment) tops the goods and services that has marked the trend list in the United States (OECD, 1999). toward “mass customization” (see David, 2000a). At the same time, practice-based This basic underlying trend must not be learning environments appear to be allowed to obscure the growing importance broadening out from situations where Fordist of science and technology-related activities. divisions of labour in offices and factories Knowledge-based economies are not, of reduced the individual’s scope of activity and, course, restricted to the realm of high hence, opportunity to learn. This, in turn, is technology, but science and technology do fostering ever-greater possibilities for tend to be central to the new sectors giving knowledge creation. momentum to the upward growth of the economy as a whole over the past few Meanwhile, the “need to innovate” is decades (pharmaceuticals and scientific growing stronger as innovation comes closer instrumentation, information and to being the sole means to survive and communication technologies, aeronautics, prosper in highly competitive and globalized new materials). economies. It is not easy to distinguish between absolute novelties (“under the sun”) These developments are reflected in an and innovations that are new only to the ever-increasing proliferation of jobs in the companies that adopt them, or more production, processing and transfer of complex adaptations of existing products or knowledge and information. This trend is not ideas to a new market. The fact remains that just confined to the high-technology and companies and society in general are information and communication service spending more time and energy on producing 2 sectors as it has gradually spread across the and adjusting to change. entire economy since first coming to light as early as in the 1970s. Society as a whole, then, Formal research may remain the cornerstone of is shifting to knowledge-intensive activities. knowledge production in many sectors (for the simple reason that it provides a more or less 1.3 Innovation is becoming the sheltered domain in which to carry out dominant activity, its sources ever-more experiments that would not otherwise be possible in real life). But the knowledge production system varied is becoming more widely distributed across a host

of new places and actors. More and more Another reflection of the aforementioned “innovators” tend to be appearing in “gear change” is the growing speed and unexpected situations: users as the source of intensity of innovation. There are two main innovation (von Hippel, 1988a), “lay people” ways in which breakthroughs come about: involved in the production of scientific first, through formal research and knowledge within such realms as health and development work off-line (i.e. “isolated” and the environment.3 “sheltered” from the regular production of goods and services); second, through learning 1.4 The revolution in instruments of online, where individuals learn by doing and, knowledge as a rule, can assess what they learn and hone their practices for what follows next. This can The fourth level at which the “soft be an extremely potent form of knowledge discontinuity” can be analysed concerns the production in many professions. major technological revolution that is taking place as we enter the digital age. It is a revolution of crucial importance in that it

- 3 - basically involves technologies for knowledge and, finally, the advent of increasingly and information production and high-performance access and dissemination. These new technologies, communication networks. Do new which first emerged in the 1950s and then technologies signal an end to that evolution? really took off with the advent of the Clearly not, for an enormous amount of Internet, have breathtaking potential. They progress remains to be made in such areas as enable remote access to information and the information search systems. But this might means of acquiring knowledge. In addition to almost be said to be the culmination of what transmitting written texts and other the French medievalist Georges Duby once digitizable items (music, pictures), they also called the “relentless pursuit of instruments allow users to access and work upon of knowledge” that has preoccupied knowledge systems from a distance (e.g. humankind since the dark ages. remote experimentation), to take distance-learning courses within the Second, information technologies enhance framework of interactive teacher-student creative interaction not only among scholars relations (tele-education) and to have and scientists but, equally, among product unbelievable quantities of information – a designers, suppliers and the end customers. sort of universal library – available on their The creation of virtual objects that can be desktops. modified ad infinitum and are instantly accessible to one and all, serves to facilitate Information technologies can affect collective work and learning. In that respect, knowledge creation in a number of different the new possibilities that computers have ways. For a start, the mere fact that one has opened up for numerical simulation the capacity to create such a wealth of represent another significant departure from information is truly revolutionary. Imagine prior experience. how hard it was for people to obtain instruments of knowledge before the modern Third, the new technologies enable the age. Apart from a handful of marvellous exploration and analysis of the contents of centres of intellectual life such as the ancient gigantic databases, which is in itself a potent library of Alexandria, such facilities were few means of knowledge enhancement (in and far between. The great eleventh century natural, human and social sciences and thinker, Gerbert d’Aurillac, had a library management alike). Research stimulated by containing no more than 20 books (although such possibilities has a strong influence in that was quite a lot in those days). Even in the some areas of managerial work. somewhat less perilous times of a couple of decades ago, imagine what a laborious task it Finally, the above three ways in which was for students to produce a round-up of information technologies affect knowledge the “state of the art” in a particular subject or creation can be combined in the discipline, and the uphill struggle involved in development of large-scale decentralized remaining abreast of the latest findings in systems for data gathering and calculation their study field. and the sharing of findings. Such extensive systems characterize the research being done Development here has been a long, these days in the fields of astronomy, drawn-out process punctuated by the oceanography and so on. invention of the codex and the book (which took over from scrolls), the perfecting of 1.5 Five years of the “new economy” -- paper, the book’s transformation into a viewed in historical perspective knowledge tool (indexes, tables, footnotes and endnotes), improvements in the Now that the emergence of knowledge-based productivity of copy-making (from the economies has been put into historical “industrial” organisation of the scriptorium perspective, the new economy debate can through to the invention of the printing only be viewed with a degree of amusement. press), the proliferation of modern libraries It has focused on the possible need for a

- 4 - radical reform of macro-economics because While the cost of replicating information the dominant tenets of that field appeared to amounts to no more than the price of making have been surprised by the American copies (i.e. next to nothing thanks to modern economy’s performance during the last technology), reproducing knowledge is a far half-decade of an entire millennium. Overall, more expensive process because some, this debate will mainly be remembered for indeed many, cognitive capabilities are not the clash between the ultra-optimists and easy to articulate explicitly or to transfer to their relatively crude economic thinking, and others. There are elements that therefore the sceptical macroeconomists who, despite remain "tacit": “we know more than we can their usual rigour and prudence, have an say” (Polanyi, 1967).5 Knowledge extremely partial and truncated view of the reproduction has therefore long hinged on impacts of new technologies (Gordon, 2000). the “master-apprentice” system (where a Yet is not what the United States and, more young person’s capacity is moulded by recently, European and other Western watching, listening and imitating) or on countries have been experiencing just part of interpersonal transactions among members an accelerating transition to the of the same profession or community of knowledge-based economy, a process that practice. These means of reproducing began quite some time ago but which only knowledge may remain at the heart of many started gathering momentum fairly recently professions and traditions, but they can easily owing to the slow maturation of the new, fail to operate when social ties unravel, when general-purpose technology of digital contact is broken between older and younger information processors and generations and when professional computer-mediated telecommunications communities lose their capacity to act in (David, 1990, 2000, 2001a). stabilizing, preserving and transmitting knowledge. In such cases, reproduction 2. Exploring the black box of grinds to a halt and the knowledge in “knowledge” question is in imminent danger of being lost and forgotten. Before going on to describe the workings of a knowledge-based economy, it is important to 2.2 Codification of tacit knowledge have a clear idea of exactly what it is that is passing through the electronic pipelines: On the other hand, knowledge may, be knowledge, information or data? Something codified: so articulated and clarified that it of each, actually. It all depends on the nature can be expressed in a particular language and of the relationship between the senders and recorded on a particular medium. recipients. Codification involves the exteriorization of memory (Favereau, 1998). It hinges on a 2.1 Knowledge and information range of increasingly complex actions such as using a natural language to write a cooking A basic distinction should be drawn between recipe, applying industrial design techniques 4 knowledge and information. Knowledge – in to draft a scale drawing of a piece of whatever field – empowers its possessors machinery, creating an expert system from with the capacity for intellectual or physical the formalized rules of inference underlying action. So what we mean by knowledge is the sequence of stages geared to problems fundamentally a matter of cognitive and so on. As such, knowledge is detached capability. Information, on the other hand, from the individual and the memory and takes the shape of structured and formatted communication capacity created is made data that remain passive and inert until used independent of human beings (as long as the by those with the knowledge needed to medium upon which the knowledge is stored interpret and process them. The full meaning is safeguarded and the language in which it is of this distinction becomes clear when one expressed is remembered). With the looks into the conditions governing the emergence of codification, “the problem of reproduction of knowledge and information. memory ceases to dominate intellectual life”

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(Goody, 1977). Learning programmes are formulae, etc. These are fundamentally then produced that partially replace the important in that they open up new cognitive person who holds and teaches knowledge. possibilities (classification, taxonomy, tree Goody (1977) notes that a written recipe can networks, simulation) that can provide a partially fill up the empty space created by the framework for the rapid production of new absence of the grandmother. knowledge (Goody, 1977). But they are only possible when people consider the matter of “Partially” is the key word here because for recording and, hence, the symbolic codification amounts to the process of representation of their cognitive states. reducing human knowledge to information, Advances in information technology-based and in the course of such transformations recording methods are crucial here, for they some things almost certainly something will allow representations of knowledge to be altered, and, quite likely, other meanings progress from the so-called “pre-literate” will be lost. What is expressed and recorded, stage (gestures and words) to the literate then, is not complete knowledge. It is a (writing and drawing) and then post-literate learning programme that helps to stabilize stages (modelling structured interactions). and reproduce knowledge. When a young technician receives a user’s manual, he or she Codification thus plays a central role in the is not directly given knowledge on “how to knowledge economy because it serves to run the machine”. That said, the manual is further memorization, communication and helpful and will serve to reduce the costs of learning, and forms a sound basis for the knowledge reproduction. creation of new knowledge objects.

In many cases, when technicians have 3. Knowledge-based communities as “learned to learn” and are dealing with a agents of economic change more or less standard machine, knowledge reproduction becomes almost instantaneous Knowledge-based activities emerge when and assumes characteristics close to those of people, supported by information and information reproduction. In more complex communication technologies, interact in cases, however, the codified knowledge, concerted efforts to co-produce (i.e. create while certainly useful, will only provide partial and exchange) new knowledge. Typically, this assistance. Knowledge reproduction will then involves three main elements: a significant occur through training, practice and number of a community’s members combine simulation techniques (aircraft pilots, to produce and reproduce new knowledge surgeons). (diffuse sources of innovation); the community creates a “public” space for There is, it must be stressed, a second and, in exchanging and circulating the knowledge5; our view, crucial function of codification. new information and communication Codification consists in translating technologies are intensively used to codify knowledge into symbolic representations so and transmit the new knowledge. that it can be stored on a particular medium. This creates new cognitive potentialities that 3.1 Rachid and Rachel remain inconceivable so long as the knowledge is attached to individual human The following fable brings out the beings and, hence, only heard (when spoken) significance of the last of the above three or seen (when put into practice) through components (the use of new technologies for interaction with those carriers. Inscribing knowledge codification and transmission). (through writing, graphics, modelling, Let us compare the experiences of two virtuality) makes it possible to examine and scholars: Rachid, a seventeenth century arrange knowledge in different ways and to astronomer from the beautiful town of Fez, isolate, classify and combine different and Rachel, an imaginary young engineering components. This leads to the creation of postdoctoral student working in a Stanford new knowledge objects such as lists, tables,

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University laboratory in the late twentieth impeding effective cooperation in the pursuit century. of knowledge (see David, 1998, 2001c).

Rachid invented a new telescope and wanted As for Rachel, let us say that she invented a to transmit the details of his discovery to small robot, working out the engineering colleagues in Cordoba, Padua and Salamanca. details with the help of a This was an arduous task because this kind of computer-aided-design (CAD) program. knowledge had not yet been codified at the Wishing to inform her community, she time and he had to copy all of his plans and quickly produced the relevant documents and notes by hand. Rachid then entrusted his plans with the help of graphic design precious documents to the northbound software. The files were then copied and caravans, in the hope that they would one day despatched as email attachments to a list of be delivered to his colleagues. There was little selected addresses. Within seconds, they were certainty of that happening. More received by dozens of laboratories problematic still are the situations in which throughout the world and hundreds of knowledge is basically memorized and passed researchers could begin reproducing the on by word of mouth (accompanied by knowledge and sending back their comments, somewhat incomplete papers intended to criticisms and suggestions. Knowledge assist recall), because the circle of effective codification and transmission costs here were users typically remains confined to direct, very low (i.e. Rachel’s marginal costs of personal contacts. Moreover, as that circle is codifying and transmitting the knowledge in widened, there is an increasing risk of the question, given the fixed infrastructure, and content becoming distorted in the course of her training costs). So too were those of its oral transmission and successive copying. reproduction. Indeed, this is the case when Only recurring communications the invention itself remains within the back-and-forth among each of the pairs framework of knowledge with which the participating in such a network of community’s members are familiar: the transmission would operate to limit the people receiving the file have “learned to propagation of "copying errors". The learn” this kind of knowledge and the likelihood of that occurring, however, attached document provides a detailed diminishes as the number of links in the learning programme. human chain of communications increases. A knowledge-intensive community is one Hence, there are physical limitations wherein a large proportion of members is preventing expansion of the community of involved in the production and reproduction people who can harness new knowledge, and of knowledge. Therefore, it is likely that such possibly further improve upon Rachid's a community constitutes a public (or design. Knowledge flows have existed semi-public) space where codification and throughout history, but, as a rule, they have dissemination costs have been radically been few and far between and relatively reduced by the pre-existence of commonly feeble. As we have seen, the principal employed concepts and terminological exceptions were permitted by the conventions; the existence of the latter maintenance of dense interpersonal further facilitates information and communication networks, such as those that communication technologies to enhance the linked the Cistercian abbeys of medieval circulation of new knowledge. Europe. This has checked the development of cumulative momentum in the growth of 3.2 Knowledge-intensive communities the stock of reliable knowledge. To be sure, and their “virtues” before the seventeenth century in the West, prevailing attitudes obstructed the Rachid and Rachel are scientists, and, in the widespread disclosure of "Nature's secrets" modern world scientific communities may be were perhaps more important than regarded as the specialized social limitations of community technology in organizations most thoroughly committed to

- 7 - the knowledge-based production activity — Curiously enough, however, teachers at the if only because they are engaged in "the elementary and secondary level, on the other production of reliable knowledge by means hand, do not fit the template of the modern of reliable knowledge". A majority of their knowledge-based communities, even though members are, therefore motivated by the they make intensive use of knowledge. There reward systems and social ethos reinforced by may be a massive amount of innovation scientific community-specific institutions to going on as individual instructors strive to disclose and share that knowledge (Dasgupta find solutions to their teaching problems, and David, 1994). Historically speaking, these but, perhaps because those problems involve scientific research communities, being working with "unstandardized materials", i.e. concerned with the capture, storage, analysis, their students, relatively few of those and integration of experimental and pedagogical innovations are passed on to, observational data, have been pioneers in the and shared by the rest of the community development and use of new information (Hargreaves, 2000). technologies. Communities characterized by all three of the Communities of programmers engaged in aforementioned components (extensive creating and improving so-called "open knowledge creation and reproduction, source" software resemble "open science" mechanisms for exchanging and research communities in many of these disseminating the resulting knowledge and an aspects, and, like them, are not able to extract intensive use of new information economic revenues directly from the sale of technologies) tend to be fundamentally the new knowledge and information-goods geared to knowledge-driven production. As that they create. They must find collateral, or such, they display a certain number of ancillary sources of support (see Steinmuller “virtues”: (in this issue), Lakhani and von Hippel (2000) • knowledge enhancement is on “open source” communities). boosted by a host of opportunities for recombination, Some business-to-business communities, transposition and synergy; however, also have modes of operation that • a large share of the knowledge share some of the same features. For base is codified, which leads to example, general research consortia are greater storage and club-like organisations, devoted to some communication capacity and collective technological goals which the makes it possible to develop new members regard as jointly beneficial, and best cognitive approaches; pursued in a cooperative manner. • quality control is guaranteed because members can each Doctors represent another instance of reproduce, test and criticize new communities, in this case communities of knowledge; professional specialization, that are • static efficiency is, as a rule, undergoing a transition towards the higher reinforced, meaning that because frequency of peer-to-peer information everyone has access to the transactions that is a key characteristic of the knowledge produced, the same knowledge-based economy and, more items will not end up being generally, of the knowledge-society, Many reinvented (while new doctors now document their new clinical knowledge can benefit from knowledge and make it available to others strong collective focus, through easily accessible electronic databases. collaborative experimentation Other practitioners then can draw on or add and enhancement efforts); to that pool of information, thus enhancing the advance of evidence-based medicine. • learning productivity is made greater by the fact that an individual can “learn to learn”

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through reproducing the belonging to different firms who exchange knowledge of others; knowledge and "trade secrets” within the • opportunities have emerged for framework of a network operating by the the spatial reorganization of rules of reciprocity (von Hippel, 1988b); activities and the creation of scientists employed by large pharmaceutical virtual communities as it has companies who are encouraged to publish in become less expensive to move scientific journals and retain strong links with knowledge than people. their university-based scientific counterparts (Cockburn et al., 1998); cooperative projects Is there an optimum size of among users of the same technology (e.g. knowledge-intensive community? From an software) who expect to make use of the empirical point of view, sizes will be seen to improved technology in the work as vary greatly between the global community of employees of different, and even rival high energy particle physicists (comprising companies (Lakhani and von Hippel, 2000). several thousand members) and a tiny By penetrating conventional organizations, community of aeronautical engineers these communities become agents of change working on a particular problem in airfoil for their industry, and, indeed, for the design, or consortia among teams of economy as a whole. molecular geneticists seeking to identify and locate the gene for a heritable form of breast In every such situation, however, there is cancer. The potential for producing and always a danger of problems arising due to reproducing knowledge will become greater conflicts between private-sector companies as a community expands; but then so will the that regard new knowledge as their exclusive costs of data search, the risk of congestion property, and knowledge communities to and anonymity amongst members, which whom sharing knowledge is their raison d’être. can, in turn, represent a source of acute The knowledge community is a fragile problems of trust. Optimum size may be said structure in that it is based on informal rules to vary as data search and filtering (reciprocity, disclosure). So it can rapidly technologies improve and new trust-building disintegrate when their members lose the mechanisms are perfected (see below, section ability or the dedication to follow those rules, 5.4). But it also depends on the nature of and, instead seek to further their individual exchanges (geared merely to accessing a interests through non-cooperative action in knowledge base or stemming from intensive the realm of markets. interactivity within the framework of a research project). 4. A few unanswered questions

3.3 Knowledge communities as agents The foregoing formulation of a definition of economic change and analytical approach to the notion of "knowledge-based activities" still leaves a Most knowledge communities cut across the good many quite basic questions to be boundaries of conventional organizations answered concerning the workings of the (businesses, research centres, public and evolving knowledge-based economy. government agencies, etc.) and members of the former are at the same time employed by 4.1 Does the knowledge-based the latter. So, the development of the economy demand specific skills and knowledge economy has seen, inter alia, abilities? conventional organizations infiltrated by individuals whose continuing attachment to Are “new skills and abilities” required for an “external” knowledge community makes integration into today's knowledge economy? them all the more valuable to the If so, what are they? Are they really as new as organizations that harbour them as regular some might like to make out? Beyond the employees. Examples of this phenomenon levels of proficiency needed for the use of from the world of business include engineers information technologies, there do appear to

- 9 - be a number of set requirements: teamwork, sketchy to ascertain whether there really is communication and learning skills. But these “some tendency for the pendulum to start sorts of “soft skills” can hardly be described swinging back” (Mokyr, 2000), thus ending as new. Indeed, though sidelined during the the centuries-long development of a factory age of Fordism, they have always, throughout system that has compelled workers in history, been crucial to the development and industry then services, trade and education to well-being of individuals in the world of commute to work.8 The costs involved, work. though impossible to quantify, have certainly been huge. Cairncross (1997) suggests that in Many experts underscore the importance of “half a century’s time it may well seem generic learning abilities (learning to learn, extraordinary that millions of people once knowing what we do not know, being aware trooped from one building (their home) to of the main forms of heuristic bias that can another (their office) each morning, only to distort the power of reasoning).6 It is better to reverse the procedure each evening … have a firm command of such abilities, they Commuting wastes time and building say, than to be able to master a specific capacity. One building – the home – stands repertoire of technical skills. The need to empty all day; another – the office – stands keep up with incessant change is essentially empty all night. All this might strike our what drives employees to develop new kinds grandchildren as bizarre”. Mokyr (2000) of skills and abilities. These go beyond the makes a sound case for considering some constant updating of technical knowledge, development of a home-production for they also pertain to the capacity to economy in light of the fact that it costs less understand and anticipate change.7 to transport knowledge than people. Such developments, however, are likely to 4.2 Returning market work to the continue being impeded by all manner of home? apathy for some time to come. Which leaves much to be done as regards the redesigning Given how efficiently knowledge can travel of space in line with the opportunities offered when reduced to information, and the fact by the knowledge economy. that the costs involved in moving people are still so high (and even rising with the growth Furthermore, many activities cannot be in size of urban areas), one may well have coordinated by virtual means alone.9 The grounds for believing that increasing emulation and spontaneity generated by numbers of people are going to be working at physical presence and social groupings often home now that the technological capacity is remain crucial. Likewise, direct face-to-face available for knowledge-sharing, remote exchanges are important when they enable access and teamwork, and organizing and other forms of sensory perception to be coordinating tasks over wide areas. Does this stimulated apart from those used within the herald the end of geography or, at the very framework of electronic interaction. For least, of the influence of geographical many individuals, it is the personal distance over how activities are organized? interactions of the workplace, the stimulus Clearly, the influence of geographical provided by a change in environment from distance is waning. Many different kinds of one's domestic habitat, that makes work transactions now take place within the enjoyable; futuristic scenarios depicting the framework of location strategies joys of tele-working from one's home-office “unconstrained by distance”. And many often are expressions of solitary authors, customers have not the slightest idea where impatient with the intrusions of the world (geographically speaking) their transaction is and people about them. being processed. On the whole, individuals now have far more But whether or not this marks a trend of room to choose between working at home work returning to the home is rather less (and cutting commuting costs) and travelling clear. Historical perspectives are still too to the collective workplace (to benefit from

- 10 - the advantages of interacting with a “real” meaningful information access. The group), but the question remains as to the relationship between human knowledge and extent that this option will prove attractive. information is reflexive, however; the formation of an individual’s knowledge 5 The challenges beyond the acquisition of understandings derived from personal experience is The profound transformations that we have enormously abetted by receiving been examining are neither automatic and interpretable (decodable) information that inevitable, nor will the results of the changes encapsulates the shared learning of others. underway necessarily turn out to be To put the point plainly, the nature of the universally beneficial. It is therefore content that is readily available for important now to consider six major issues distribution is critically important. Access to that our societies need to address in order to channels of communication that are ensure a fuller realisation of the potentials of transmitting information of certain, the knowledge economy. capability-building kinds can play an instrumental part in accelerating the acquisition of the human cognitive skills that 5.1 Access to information and to will impart enhanced relevance and greater knowledge bases value (utility) to the other information streams which also may by carried through Our community-based approach has the those same channels. virtue of showing that access to the knowledge economy is still highly limited and Returning to the simpler issue of providing that there are great disparities between universal telecommunications access, for the countries and social groups. moment, it is important to acknowledge how large a gap exists between reality and the Clearly, the frequently distinction drawn evocative idea that because we all share the between “information society ‘haves’ and planet, humankind belong to “a global ‘have-nots’” is overly simplified, as is the village” (UNDP, 1999). On the one hand, notion that there has emerged a “digital information infrastructure in some countries divide” that can and should be overcome by is so poor that “planet Internet” would providing universal technical access to the appear to belong to altogether another galaxy. Internet. Telecommunications access As many as 133 developing countries have undoubtedly is a relevant consideration, asked the United Nations to maintain radio given that more than two-thirds of the stations and other traditional media as a world’s people today do not have the means of disseminating information, because advantage of simple telephone connections, use of the Internet alone would exclude many let alone computers and links to Internet people from access to information flows. service providers. Yet, the more difficult and in a sense more fundamental problems are Participation in knowledge-based economies, not simply those of providing greater on the other hand, stems from technological access to information streams. intangible-capital investments in educational Rather, they involve furnishing people with effort on the part of teachers and students, the cognitive capacities and intellectual efforts directed to forming the basic skills and frameworks than enable humans to interpret, abilities (reading and writing) that text-based select and utilise information in ways that cultures require. Claims that a technological augment their capabilities to control and leap would enable a society to bypass certain enhance the material circumstances and stages in the development of knowledge qualities of their existence. infrastructures should be taken with a pinch of salt. Could e-books ever compensate for One may say, then, that one of the respects in the lack of paper text-books for elementary which “knowledge is power” reflects the fact school instruction? Can a civilization be rid that knowledge access is essential for itself of the disabilities of illiteracy through

- 11 - the widespead application of audio-visual developed countries’ systems continues rely media? Hardly. Post-literacy does not mean a upon talented students abroad as the means return to illiteracy. It may be enjoyable and in of overcoming shortages of young people some instances highly efficient for people to seeking advanced scientific training, they will exchange information imparted by pictures, pursue selectively liberal immigration policies but, until a richer and standardised pictorial that developing-country scientists find hard vocabulary is created, increasing reliance to resist; and communities will not be formed upon non-textual communications eventually in their home land.12 will restrict the cognitive progress produced by more complex (codified) representations The development of dynamic scientific of knowledge (section 2.2). communities does, of course, hinge on a number of other factors.13 But all the means That said, our community-based approach are in place to bring an end to the “relentless does provide a good many pointers and pursuit of instruments of knowledge” for grounds for hope. Some scientific scientists working in developing countries. communities in the developing world are Other professional communities – doctors, close to meeting the conditions to be able to teachers, urban planners and architects – also participate more fully in the discovery and represent focal points where the key creation of new knowledge, rather than components of the knowledge-based remaining trapped behind the frontiers of community should gradually be deployed. research and therefore unable to direct its Finally, Arora, et al. (this issue) stress the advance toward the solutions of problems virtues of the technology markets as that have pressing relevance in their own development tools whenever they help to societies. In their case, then, the problem drastically reduce the cost of access to really is one of becoming extensively technological know-how. equipped with high-quality information infrastructures of a sort that the researchers 5.2 Uneven development of knowledge (many of whom trained abroad) already are from one sector to the next capable of using. Unequal access to pertinent knowledge bases Some of the problems of access to the may well constitute an important condition large-scale and very costly research facilities underlying perceptible differences in the in the natural sciences – of a sort that only the success with which different areas of economically developed countries can afford, endeavor are pursued within the same often through cooperative undertakings -- society, and the pace at which productivity now may be overcome by means of advances in different sectors of the economy high-speed telecommunications.11 The latter during a given historical epoch. In the permit remote access to observational nineteenth century, for example, even in the instruments and mass data-transport for more developed high income economies, the subsequent analysis, and the cost of improvement of agricultural productivity providing the necessary bandwidth typically lagged behind that in industry in good part is much lower than that of constructing the because the relevant knowledge base in plant facilities, even if the technical capability to and animal biology and soil chemistry was build these existed in the developing country. comparatively narrower, and less dynamic, than was the case in mechanics and inorganic While “moving the data” is thus part of the chemistry. That situation was largely solution, the international movement of transformed by the second half of the scientific personnel gives rise to some twentieth century, as is testified to by the significant problems for the developing successes of "the Green Revolution" brought countries. These are the losses of research by new plant varieties, and the acceleration of and future teaching talent that may occur agricultural productivity growth rates in the so-called scientific and engineering brain advanced economies to parity with those in drains.” As long as the viability of the their manufacturing sectors.

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and intense. These are the sectors capable of Today it remains astonishing to observe the carrying out controlled experiments and contrast between fields of economic activity thoroughly testing results while maintaining where improvements in practice are closely constant liaison and feedback between the reflecting rapid advances in human various stages of experimentation and knowledge -- such as is the case for application. Besides, technological advances information technologies, transportation, generate better scientific instruments, which and certain areas of medical care (surgery and in turn help to improve experimentation drug therapy) -- and other areas where the methods. The interlinkages between state of knowledge appears to be far more “science-enlightened technology” and constraining. Do people today know how to “technology-equipped science” provide the teach, plan cities, avoid the ravages of war, or basis for the rapid development of perform string quartets any better than they knowledge in some areas. It is a model that did in the nineteenth century? Probably not involves heavy investment in off-line to any noticeable extent. The fact is that experimental research activities and knowledge is not being developed to the large-scale knowledge codification so that same degree in every sector. interactions between science and technology can be sustained by a standardized and In some measure this is attributable to the systematic knowledge system. failure of mechanisms that would otherwise properly gauge the intensity of each of the Many sectors visibly fail to meet these items forming the array of society's wants, in conditions for rapid progress. In the field of the way that markets gauge the intensity of education, for instance, science does not demands for the array of privately consumed much “enlighten” the art of teaching. It can commodities; thereby generating price signals hardly be said to play a very strong role as a which stimulate profit-motivated efforts to factor enabling the direct production of satisfy those wants. The combatants in a systematic knowledge which translates into military conflict generate demands for “programmes that work” in the classroom weapons, to which arms merchants hasten to and lecture theatre. Education is not a field respond; the civilian populations that, as a that lends itself well to experimentation: what result are likely to be "collaterally damaged" works with a pilot school may prove hard to are not so readily able to generate “a market replicate elsewhere. Part of the problem is for inoperable weapons.” Analogously, albeit that experimental approaches are impossible less dramatically, the same point is made by to describe in precise enough detail to be sure observing that pharmaceutical companies that they really are being replicated (Nelson, respond to the large market demand for new 2000). Education also constitutes a realm drugs to treat ulcers and hypertension, rather where knowledge is little codified. There is no than investing R&D on improving the equivalent in teaching to the kinds of availability of drugs for the victims of malaria reference books and documents used by and other tropical diseases that ravage poor doctors, lawyers or engineers. So young countries. teachers begin their careers without the help of those “sets of codified instructions”. As a Nevertheless, differences in the ability to rule, the profession of teaching is not focus demand do not provide a complete organised to keep practitioners informed of explanation. It is equally important to alternative approaches and solutions tested acknowledge that the uneven state of the by others; instead they proceed by intuition accessible knowledge may arise from the fact and imitation of recognised practices in the that the capabilities for supply to respond to repertoire of "master teachers". There are perceived wants are not everywhere the same. only weakly developed mechanisms whereby The sectors where knowledge creation has communities of educational practitioners occurred at an extremely rapid pace are those collectively can capture and benefit from the in which the interrelationships between individual discoveries made by their science and technology are especially close members. Opportunities for regular

- 13 - knowledge exchanges between educational software. This movement started in the US, researchers and teachers are few and far where it received impetus under the 1980 between (Hargreaves, 2000). Bayh-Dole Act (1980) that permitted patent applications to be filed for discoveries and A good number of sectors not benefiting inventions issuing from research projects from the “science-enlightened technology” that were funded by the federal model thus find themselves confronted by government, but is has since spread the question of how they can enhance internationally, being reinforced by the knowledge at similar speeds to the efforts in other countries to foster closer science-based sectors. Instead of attempting research collaboration between universities to export that model to sectors where it is and public research institutes, on the one ill-suited, one would be better off devising a hand, and private industry on the other. The role for science in contexts where the bulk of other trend has seen a concerted effort by all innovation stems from practical experience; a parties to secure copyright protection for role geared not just to supplying “tools that the electronic reproduction and distribution work”, but to developing a methodology for of information, in part to exploit the documenting, assessing and promoting opportunities created by electronic practice-based innovations. publishing, and in part to protect existing copyright assets from the competition that The success of the “science-enlightened would be posed by very cheap reproduction technology” model has obscured the fact that of information in digital form over there are other ways in which science can electronic networks. interrelate with technology; and that developing them can help to improve the The sudden upsurge of enthusiasm for advancement of knowledge in some sectors. expanding the private property rights over

5.3 To protect intellectual property information has given rise to a rather rights or the public domain of knowledge paradoxical situation (Foray, 1999). The ? technological conditions (codification and low-cost transmission) may be right for The past two decades have witnessed individuals to be able to enjoy instant and growing efforts to assert and enforce unfettered access to new knowledge, but a intellectual property rights over scientific proliferation of intellectual property rights and technological knowledge through the inhibits access to such information in areas use of patents, copyrights, and other, more (basic research in general, the life sciences, novel forms of legal protection. (The latter software) where new knowledge had include the special legislation introduced in remained largely in the public domain. the US in 1980 to extend copyright Thus, it may be said that individuals and protection to the "mask work" for firms today are striving to create artificial photo-lithographic reproduction of very scarcities – by achieving legally sanctioned large microelectronic circuits on silicon monopolies of the use of information -- in wafer, and the European Union's protection fields where abundance naturally prevails, of databases by new national statutes thus giving rise to an enormous amount of implementing an EC Directive issued in waste. 1996.) These developments have coincided with two other trends that, similarly, have To understand the economics of intellectual tended to expand the sphere of private property, and thus the irony of this situation, control over access to knowledge, at the one has to start from the observation that knowledge is not like any other kind of good, expense of the public knowledge domain. and certainly does not resemble conventional One trend has been the rising tide of commodities of the sort that are widely patenting activity by universities, especially traded in markets. Intellectual property in the areas of bio-technology, cannot be placed on an equal footing with pharmaceuticals, medical devices and physical property, for the simple reason that

- 14 - knowledge and information possess a specific intellectual property rights is the threat of characteristic that economists refer to as unfair competition -- particularly the “non-rival in use”: the same idea and its misappropriation of the benefits of someone expression may be used repeatedly, and else’s expenditure of effort – which might concurrently by many people, without being otherwise destroy the provision of thereby “depleted.” This contrasts with the information-goods as a commercially viable properties of ordinary “commodities” that activity. The nub of the problem here is that are consumed: if Marie eats the last slice of the cost of making a particular information cake in the kitchen, that piece cannot also be good available to a second, third, or consumed by Camille; whereas, both girls thousandth user are not significantly greater may read the same novel either than those of making it available to the first simultaneously or sequentially, and in so one. When Théo listens to a piece of music, doing they will not have rendered the story modern reproduction and transmission any the less available for others to enjoy. technologies will permit Quentin, Manon and millions of others to listen to the same piece without generating significant additional The allocation of property rights in the case costs. The costs of the first copy of a of information-goods does not attempt to compact disk (CD) are very great, compared confer a right of exclusive possession, as do to the cost of “burning” a second, third or property laws governing tangible goods such millionth copy of that CD. Ever since the as land. Indeed, to claim a right of possession Gutenberg revolution, the technical advances one must be able to describe the thing that is that have lowered the costs of reproducing owned, but no sooner do you describe your “encoded” material (text, images, sounds) idea to another person than their mind comes also has permitted “pirates” to appropriate into (non-exclusive) possession of it; only by the contents of the first copy without bearing keeping the information secret can you the expense of its development. Unchecked, possess it exclusively. this form of unfair condition could render What the creation and assigning intellectual unprofitable the investment entailed in property rights does, then is to convey a obtaining that critical first copy. monopoly right to the beneficial economic Producers of ideas, texts, and other creative exploitation of an idea (in the case of patent works (including graphic images and music) rights) or of a particular expression of an idea are subject to economic constraints, even (in the case of copyright) that has been when they do not invariably respond to disclosed, rather than being kept secret. This variation in the incentives offered by the device allows the organisation of market market. If they had no rights enabling them exchanges of “exploitation rights,” which, by to derive income from the publication of assigning pecuniary value to commercially their works, they might create less, and quite exploitable ideas, creates economic incentives possibly be compelled to spend their time for people to go on creating new ones, as well doing something entirely different but more as finding new applications for old ones. By lucrative. So, there is an important economic tending to allocate these rights to those who rationale for establishing intellectual property are prepared to pay the most for them, the rights. A strong case also can be made for workings of intellectual property markets also protecting such rights by the grant of patents tends to prevent ideas from remaining in the and copyrights, especially as that way of exclusive (secret) possession of discoverers providing market incentives for certain kinds and inventors who might be quite of creative effort leaves the valuation of the uninterested in seeing their creations used to intellectual production to be determined ex satisfy the wants and needs of other members post, by the willingness of users to pay; it of society. thereby avoids having society try to place a value on the creative work ex ante – as would be required under alternative incentive Another potential economic problem that is schemes, such as offering prospective addressed by instituting a system of authors and inventors prizes, or awarding

- 15 - individual procurement contracts for The difficulties of arriving at “scientific specified works. closure” on such matters, combined with conflicts of economic interests over the distribution of the benefits of new But, the solution of establishing a monopoly knowledge, quite understandably, have right to exploit that “first copy” (the idea sustained a long history of intense debate in protected by the patent or the text protected this area. In each era of history new by copyright), alas, turns out not to be a developments affecting the generation, or the perfect one. The monopolist will raise the distribution of knowledge, give rise to a price of every copy above the negligible costs revival of these fundamental questions in of its reproduction, and, as a result, there will new guises. Today, the “hot issues” arise be some potential users of the information from questions concerning the desirability of good who will be excluded from enjoying it. (a) curtailing patent monopolists’ rights by The latter represents a waste of resources, letting governments impose compulsory referred to by economists as the licensing of the local manufacture of certain “dead-weight burden of monopoly”: some pharmaceutical products, or of some medical people’s desires will remain unsatisfied even devices; (b) providing those engaged in though they could have been fulfilled at non-commercial scientific research and virtually no additional cost. Economists as a teaching with automatic “fair use” rule abhor “waste,” or “economic exemptions from the force of intellectual law; inefficiency,” but they believe in and rather (c) permitting purchasers of copyright like the power of market incentives. Not protected CD’s to freely share music tracks surprisingly, then, the subject of intellectual with others by means of peer-to-peer property policies has proved vexatious for distribution over the Internet. the economics profession, as it presents numerous situations in which the effort to limit unfair competition and preserve There is no easy general solution to this class incentives for innovation demonstrably of economic problems, and useful answers to results in a socially inefficient allocation of the basic questions raised (are new rights that resources. would better address the new circumstances required, and, if so, what form should they take?) will vary from one case, area or There is not much empirical evidence as to situation to the next. Most economic and how altering the legal conditions and terms of legal analysis favours protecting broad classes intellectual property rights translates into of intellectual works, rather than very specific change in the overall strength of economic forms that are more likely to be rendered incentives for the producers, or about the economically obsolete. But having flexible effectiveness of bigger incentives in eliciting legal concepts which are meant to be applied creative results; nor is it a straightforward in novel situations creates added matter to determine the way in which holders uncertainties for innovators. There is likely of a particular form of intellectual property to be a protracted period of waiting, and right would choose to exploit it, and the struggling to have the courts settle upon an consequent magnitude of the resultant social interpretation of the law that is sufficiently losses in economic welfare (“the dead-weight predictable in its specific applications to burden”). Without reliable quantitative provide a reliable guide for commercial evidence of that kind, obviously, it is hard to decision-making. decide in which direction to alter the prevailing policy regime in order to move towards the notional optimum for any Another general principle that finds widely particular market. expressed approval is that of harmonising intellectual property rights institutions internationally, so that arbitrary, inherited legal differences among national entities do

- 16 - not interpose barriers to the utilisation of the The import of this is to strictly limit the scope global knowledge base in science and of grants of monopoly rights over research technology. The catch in this, however, is tools and techniques, curtailing the freedom that harmonisation rarely is a neutral of the rights-holders levy whatever “tax” they procedure. Representatives of polities usually wished upon others who might use such are loathe to cede property rights which their inventions and discoveries in order to constituents already possess, and, generate still further additions to the consequently, programs of “harmonisation” knowledge base. Collective knowledge turn out to impart an unwarranted global bias enhancement is thwarted when discoveries towards expanding the range of property cannot be freely commented upon, tested by rights that will be recognised and raising the replication, elaborated upon and recombined strength of the protections afforded. by others. Putting this in other words, intellectual property regimes designed to make it easier for many to “see farther by A more tenable broad policy position on this standing on the shoulders of giants” would contested terrain may be derived from the appear likely to be more fruitful than a recognition that the generation of further strategy which render those shoulders less knowledge is among the major important easily mounted by others, in the hope that uses of new knowledge, and, at the same this would stimulate the growth of more, and time, there are enormous uncertainties taller “giants.” surrounding the nature and timing of the subsequent advances that will stem from any The extension of monopoly rights over the particular breakthough. This is especially true application of particular research tools in the of fields where new discoveries and life sciences -- techniques such as PCR inventions tend more readily to recombine in (polymerase chain reaction) and monoclonal a multiplicity of ways that generate further antibodies, new bioinformatic databases and novelties. A reasonably clear policy search engines, as well as generic information implication follows from this, and from the about the structure of genetic material and additional observation that although we will the way that these govern the production of seldom be able to predict the details and proteins – is coming to be seen as especially future social value attaching the sequelae of a problematic. The issuing of such patents may specific advance in knowledge, it is far more indeed be responsible for stimulating more certain that there will be a greater flow of commercially oriented R&D investment by entailed discoveries if the knowledge upon pharmaceutical companies, and others who which they rest remains more accessible and look forward to selling them access to new widely distributed. Therefore, rather than information. Yet, intellectual property concentrating on raising the inducements to protection in this sphere is likely to impose make “hard-to-predict” fundamental heavy dynamic welfare losses on society. It breakthroughs, it will be better to design will do by impeding access to existing intellectual property regimes in ways that information, or by increasing the wasteage of permit non-collusive pooling and resources in functionally duplicative research cross-licensing. As a practical matter, this aimed at avoiding patent licensing charges. consideration generally would call for raising This raises the cost not simply of research the novelty requirements for patents, directed toward producing a specific new awarding protection for narrower claims, product(e.g., diagnostic test kits for a requiring renewals with increasing fees, and particular class of genetically transmitted other, related measures. All of these steps conditions), but, also of exploratory research would encourage entry into the process of that may enable the future creation of many generating further knowledge by utilising the applications, including those that still are breakthroughs that have occurred and been undreamt of. To use the evocative phrasing adequately disclosed (see David and Foray, of a leading European scientist, cooperatively 1996). assembled bioinformatic databases are permitting researchers to make important discoveries in the course of “unplanned

- 17 - journeys through information space.” If that Cassier, this issue). But, one must not be space becomes filled by a thicket of property deluded into supposing that appeals to rights, then those voyages of discovery will principles of equity alone will be sufficient in become more troublesome and more deciding such contests in the area of political expensive to undertake, unanticipated economy. discoveries will become less frequent, and the rate of expansion of the knowledge base is 5.4 New problems of trust? likely to slow. Popular wisdom maintains that “good fences Fraudulent behaviour, forgery and pretence make good neighbours”. This may apply in have obviously not been spawned all of a the case of two farmers with adjacent fields – sudden by the virtual world. Questions one growing crops and the other grazing concerning the original and the copy (Eco, cattle – or gold diggers excavating 1992), not to mention the evaluation of neighbouring concessions. But unlike land, goods that are the object of commercial forage or other kinds of exhaustible transactions, have given rise to the problem resources, knowledge is not depleted by use of trust and have highlighted how crucial for consumption; data-sets are not subject to trust-building mechanisms are to the being “over-grazed”, but instead are likely to functioning of markets and communities be enriched and rendered more accurate the since the beginning of time. But the more that researchers are allowed to comb development of virtual relations has given the through them (David, 2001). trust issue a new edge. What is at stake here is the entire range of mechanisms that will facilitate interpersonal and The issues just examined are entangled with inter-organizational transactions, given the other, difficult problems concerning the new conditions for knowledge transactions institutional (as distinct from the and exchanges: increasing specialization, technological) determinants of human beings increasingly asymmetrical distribution of ability to enhance their “capabilities” by information and assessment capabilities, finding and making use of existing ever-greater anonymity among interlocutors repositories of knowledge and sources of and ever-more opportunities for forgery of information (Foray and Kazancigil, 1999). identity. Clearly, new methods need to be There are special problems of access to devised to “certify” the knowledge circulating scientific and technological knowledge on the Internet within a context where inputs relevant to developing countries;12 of what is are no longer subject to control (unlike the means to maintain that every individual has a knowledge disseminated by scientific right to benefit from the collective advance journals, for example, whose quality and of human knowledge affecting such reliability are validated through the peer fundamental, capability enhancing conditions review process). as health and education.13 A delicate attempt at regaining a better 5.5 A society bereft of memory balance between protection of the public domain of knowledge from further Today’s younger generations might never encroachments by the domain of private experience the emotions aroused on property rights, at least in regard to some rediscovering old toys or books in the attic sectors where services are recognised to and picking them up to find that they still profoundly effect human “well-being” work. Future machines may never be able to (health, education). The notion of a universal bring back to life the equivalent of our elders’ right to health appears to have the “strength” wooden horses and toy soldiers: the to countervail against the national and playstation, earlier versions of which are international campaigns led by already impossible to use on the latest pharmaceutical companies to secure computers. Our societies are confronted by intellectual property owners the right to an almost paradoxical situation whereby we unregulated exploitation of their patents (cf. have never before had such powerful storage

- 18 - and memorization technologies at our integrated view of things. This can have disposal, yet memory itself appears to be in disastrous consequences. At the level of danger. Two problems are beginning to global policy-making, knowledge that can emerge. help resolve a particular problem may exist without being “visible”. It can go unnoticed First, with information technologies, we are by the decision-maker. Knowledge of the not saving documents but sets of instructions greenhouse effect, for instance, has been in that need to be interpreted and managed by the public domain since 1886 thanks to the the right hardware and software. So any lack study by Svente Arrenhuis, but failed to of attention paid to the complementary capture the attention of the political system components of a codified knowledge system for another hundred years. There is a big (continuity of languages, keeping difference between the existence of programmes that enable access to older files) knowledge in some place or the other and its runs the risk of irremediably altering society’s availability to the right people in the right overall memory. place at the right time. It amounts to a matter of knowing how to integrate and organize Second, given the exponential growth of all fragmented, scattered and thinly-spread manner of documents, does it all really need knowledge.16 to be kept? If not, then what does? On what medium (electronic, paper)? The unit costs of The famous economist, Alfred Marshall, short-term storage and data retrieval may raised basically the same question, albeit with have fallen, but significant problems remain respect to industrial activities: how can one with respect to memorizing, filing and organize and coordinate highly specialized accessing old documents. The new electronic activities within a context marked by an media for storage are not so stable, indeed, extreme social division of labour? The they are unstable in comparison with the answer, according to Marshall, lay in two low-sulfite rag paper on which good books main factors: a reduction in transport costs have long been printed. Furthermore, the and local concentrations of activity clusters, artifical languages used to encode with each locality creating the right information for computer processing also is conditions for integrating knowledge comparatively less stable, in that it is more (Loasby, 1989). likely to suddenly become obsolete, requiring the corpus of stored information to be So the whole question revolves around the periodically “migrated” to a new code that capacity of the new information technologies new programs are able to read. This has to enable better integration of knowledge made “storage” of information in the digital through helping bring down the cost of age less a matter of archiving than a process transporting it and paving the way for local of recurring renewal, a cultural task for which concentrations of virtual activities. literate societies turns out not to be well-prepared. The new technologies, under certain conditions (see section 2) clearly do favour 5.6 Fragmented knowledge: how can it the low-cost transmission of knowledge and be put back together again? the creation of virtual communities. But the maintenance of human organizations in There is a natural tendency for knowledge to which incompletely codified knowledge fragment as it becomes subject to more resides poses a variety of socially and in-depth division and dispersion. The politically delicate challenges, involving the division of knowledge stems from divisions establishment of procedural authority to of labour and increasing specialization. Its decide contested cognitive questions and dispersion is the product of increasingly stablize the knowledge held by the diffuse sources of innovation. The result is an community, as well as to recruit new extremely fragmented knowledge base, which members and inculcate in them the makes it difficult to form a broad and cooperative mores that suppress destructive

- 19 - opportunistic behaviors (Steinmueller, 2001). What really needs to be done is to establish Evidently, managing a social repository of and develop interdisciplinary communities knowledge is not the same thing as managing made up of a heterogeneous range of a library or an archive. Yet, much of the members. In such cases, the sound history of civilisation, from the dawn of “Marshallian” properties of information literacy onwards, has focused attention and technologies really can serve to support the physical resources upon the evolutionary integration of knowledge. elaboration of archiving techniques and bought a corresponding waning of systematic 6. From the knowledge-based commitment of investment in alternative economy to the knowledge-based society modes of maintaining the continuity of memory in dynamic communities. The knowledge economy’s growth into the knowledge society hinges on the proliferation That is not the only problem, however: some of knowledge-intensive communities. These researchers, however, argue that the use of communities are basically linked to scientific, powerful communication technologies such technical and some business professions or as the Internet may promote uniformity to projects. As has been said, they are the detriment of diversity (Van Alstyne and characterized by their strong knowledge Brynjolfsson, 1996). The time spent in production and reproduction capabilities, a on-line exchanges with members of one’s public or semi-public space for learning and own, pre-selected community leaves less time exchange and, the intensive use of available for actual encounters with a information technologies. To function wide-ranging variety of people: if a physicist effectively, they must have overcome many, is enabled to concentrate upon exchanging if not all of the challenges that this review has email and electronic pre-prints with other identified. Only when increasing numbers of physicists around the world who are working communities displaying those very in her specialized subject area – as indeed characteristics are formed across a wide array researchers today generally are – they are of cognitive fields, when professional likely to devote less time, and be less experts, ordinary users of information, and receptive to new ways of looking at the world uninitiated students are brought together by to which they would be exposed by chance their shared interest in a given subject, will meetings, and lunch-time conversations with “the knowledge society” become a reality colleagues who work in other disciplinary rather than a vison of a possible future. fields. Facilitating the voluntary construction of highly homogeneous social networks of scientific (or other, say, political) communication therefore allows individuals to filter the potentially overwhelming flow of information. But the result may be the tendency of over-filtering, which eliminates the diversity of knowledge and that circulates, and thus diminishes the frequency of radically new ideas. In this regard, even a journey through the stacks of a real library can be more fruitful than a trip through today’s distributed virtual archives, because it seems difficult to use the available “search engines” to efficiently emulate the mixture of predictable and surprising discoveries that typically result from a physical shelf-search of an extensive library collection. New technologies are not automatically going to resolve the issue of knowledge integration.

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Notes purpose (research networks and consortia where partners share their knowledge) and 1. The French language offers a markets whose modi operandi are conducive distinction between “savoir” and to efficient knowledge dissemination (see the “connaissance” that has no real equivalent in articles in this issue by Cassier and Arora, et English, though it can be conveyed by adding al.). the qualifier “reliable”. Reliable knowledge 7. This can happen when too much (“savoir”) means certified, robust knowledge importance is attached to the latest that has been legitimized by some information or too little attention is devoted institutional mechanism (be it scientific peer to the size of sample selected to assess review or collective memory and belief information. Another good example is be the systems). Other forms of knowledge familiarity heuristic (cf. Favereau, 1998). (“connaissance”) also enable action (knowing 8. See the article by Lam on the how to do the gardening, DIY) but have not comparative analysis of the societal been put through the same tests as certified organizations underpinning the development knowledge. What separates the two has less of skills in the knowledge-based economy to do with a contrast between the scientific (this issue). and non-scientific than whether or not the 9. Some 65% of industrial workers in knowledge has been subjected to institutional France were already working away from testing: “gardening knowledge” is reliable, home by 1906 (Mokyr, 2000). wide-ranging and relatively decontextualized, 10. This point is more fully discussed by but each gardener has his or her own local Feldman (this issue). (and locality-specific) knowledge. Yet the 11. On large scale facilities for scientific knowledge-based economy does not research, the potentialities of electronic data preclude either form, meaning that it is not networks, and international cooperation in geared solely to the formal production of “megascience” projects, see, e.g., Irvine “reliable knowledge”. (1997), esp. Chs. 28, 30. 2. The article by Hatchuel, et al. (this 12. Some authors call for the deployment issue) provides useful insight into the new of knowledge networks that involve the knowledge management methods used by return of scientists and engineers (e.g. from companies within the context of “intensive California to Taiwan or certain parts of innovation-based capitalism”. India). According to this “brain circulation” 3. The article by Rabeharisoa and Callon model, the latter return home highly trained (this issue) is entirely devoted to this point. and imbued with the entrepreneurial spirit of 4. This is an important distinction, the Silicon Valley. But it gives rise to other such implications of which are examined in greater problems as the isolation of the scientific elite detail by Steinmueller, by Forero Pineda and from the rest of the population and the Salazar, and by Hansson and Lam (all in this propagation of a single socio-economic issue) . model (Saxenian, 2001). 5. On the concept of “tacit knowledge” 13. See the article by Forero Pineda and and its recent uses in economics, see Cowan, Salazar (this issue). David and Foray (2000), and other 14. See the articles by Forero Pineda and contributions accompanying this article in the Salazar, Sarmiento and Forero Pineda, and same special issue of Industrial and Corporate Arora, et al. (this issue). Change, 9(2), Guest-edited by P. Cohendet 15. See the article by Cassier (this issue). and W. E. Steinmueller. 16. See the article by Hansson on 6. The concept of public (or semi-public) integrated knowledge within the context of spaces for knowledge circulation is complex. public debate and decision-making processes Such spaces can include areas in which (this issue). exclusive property rights cannot be granted, either “constitutionally” (as in the case of open science) or within the framework of organizations especially designed for the

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