ISSN- 2394-5125 VOL 7, ISSUE 6, 2020 KEY MODELS OF KNOWLEDGE BASED ECONOMY

Manju Nandal1 Research Scholar, Department of Management Studies (DMS), Deenbandhu Chhotu Ram University of Science and Technology, Murthal,13109, India. [email protected]

Dr. Anand Chauhan2 Assistant professor, Department of Management Studies (DMS), Deenbandhu Chhotu Ram University of Science and Technology, Murthal,13109, India. [email protected]

Abstract “This paper analyses the factors which stimulated transformations of Traditional Economy to the , highlights the basic treats of Knowledge-based Economy (KBE). The primary concern is pushed to the examination of information sway indication to the improvement of economy. The creator features plausibility to evaluate the infiltration level of KBE which could show box the presence of results of information articulation which could be made in obtaining, creation, use and improvement of them. The last marvel is deciphered as information articulation attributes: monetary and social setting, HR, ICT, creative business and advancement strategy. The reason for this analysis was based on the idea that in spite of the knowledge economy existence in all developed World countries an authoritative, all inclusive rundown of markers for planning and estimating the KBE doesn't yet exists. The article presents two hypothetically isolated gatherings of Knowledge Expression Assessment Models. Considering deficiencies of dissected models and looking to make adaptable model for information articulation appraisal, instrument for the evaluation of information articulation in KBE is proposed in the paper. The design of evolvent of information articulation appraisal rules just as the potential fields and subjects for utilization of proposed instrument is pronounced in the article too.” Key Words: Traditional Economy, Knowledge Economy, Knowledge Expression Assessment Models, models, instrument.

Introduction “Over the past 25 years, the pace of information creation and scattering has expanded essentially. Financial exercises related with the creation and usage of data and information has become a motor of monetary development in the created economies, progressively changing the wide range of various elements of improvement and the whole society. The sped up in the creation and scattering of information has prompted the fast speed of present day and proficient creation procedures, in addition to the expanded likelihood of jumping, which has subsequently brought about the getting substantially more serious.” “Responding to the later circumstance in the changing motors of financial turn of events, European Council in 2000 March in Lisbon received tested arrangement for the fate of European Union. Vital objective was characterized remembering both outside difficulties – globalization response.” “The knowledge economy is not just a new theoretical concept, but a new epoch, which has a fundamental difference from the era of agrarian and industrial economies. Although it appeared only in the early 1990s, it has already had an impact and caused changes in all spheres of economic and social life, and this influence is constantly growing. The trend of development of a knowledge economy is the formation of a knowledge economy, which will mean the onset of a new stage in the development of the global economy [1].” Literature Review and conceptual framework “Many studies show that the transition to a knowledge-based economy through the introduction of innovation significantly increases a country‟s performance as well as living standards. Innovations are an important determinant of sustainable competitiveness and the growth of the knowledge economy. They are a fundamental factor in progress in the social, environmental, and economic fields [2].” “Sinakou [3], Hanushek [4], „irá et al. [5], Valliere and Peterson [6], Busu and Trica [7], and Kisel‟áková et al. [8] identified indicators that are suitable for quantifying economic growth (e.g., GDP, inflation, unemployment, productivity, government departments, and circular economies), but the next important indicator to identify the economic growth in today‟sworld is knowledge Fromthis view, we can argue that development would be limited if knowledge support were limited. However, creating new knowledge is not expensive, but, inmost cases, it takes effort and time [9].” “For a more accurate understanding of the term “knowledge economy”, it is necessary to become acquainted with several approaches to it (Durazzi [10]; Saridogan and Kaya [11]; Sagiyeval et al. [12]; Milewska [13]; Ayan and

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ISSN- 2394-5125 VOL 7, ISSUE 6, 2020 Pabuccu [14]). There is no single approach or clear concept for defining the term “knowledge economy”. The OECD defines knowledge-based economies at a very general level as those that are directly based on the production, distribution, and use of knowledge and information [15]. The knowledge economy can be defined, in one respect, as a way of creating a product based on activities dependent on knowledge and expertise that contribute to the creation of scientific and technological progress. The fundamental determinants of the knowledge economy include a more significant ratio for the dependence of the economy on intellectual abilities than on physical inputs or natural resources in the context of the integration of new knowledge at each level of the production process [16]. The knowledge economy is developing on the basis of two driving forces. The first is the increasing knowledge level of economic operations and the second is the globalization of economic events [17]. According to Dudová [18], the prerequisites for the emergence of knowledge economies include the long-term tendency of a gradual increase in the weight of intangible capital on production factors and the emergence and growth of the delusion of information and communication technologies. Changes in countries towards the transition to the level of knowledge economy are considered a new trend in the global environment. This transformation has become a necessity, especially for emerging economies, which sure from a low degree of economic competitiveness. It should be noted, however, that these changes require a clear and effective policy-making approach that responds, in particular, to the needs of these countries and their available resources [19].” Economy Transformations in the 21st Century “The main factors which stipulated the transformations of economy scope could be presented in such chain of events (not necessarily in the presented sequence):”  “The emergence of knowledge workers category (Drucker, 1989). This is the workers which duties are directly concerned with the imperative performance of high qualification works;”  “The increases of international cooperation of enterprises as well as more efficient participation in the local business networks;”  “Increased interest in R&D as well as in creation and implementation of innovations;”  “The understanding of the values of specific knowledge and implementation of them to the processes of activities of enterprises and organizations;”  “The increase of demand of high qualified workers;”  “Acceleration of production internationalisation; as well as shortening of life circle of products and technologies;”  “The openness of world economy. This stipulates the growth of foreign direct investments;” Characteristics of Knowledge based Economy “Knowledge-based economy is not a branch of economy. It was formed because of the need and determination to create knowledge with a view to achieve economic and social welfare which could be used to satisfy thirst for knowledge. There was a big wish to achieve competitive advantage, thus providing necessary stable economic conditions revealed through the pursuance of effective national policy and maintenance of stable fiscal system as well as effectively functioning market. KBE covers all of country spheres: economical, social, and cultural. For the development of knowledge economy macro economical stability should be the key condition and starting position. The other not less important factors are functioning of , good institutional framework, strengthening the competition of telecommunications and technologies, encouraging the development of e-activities, stipulation of collaboration of government, industry and higher education institutions and etc.[20].” “The key policy recommendations concerning the Knowledge-based Economy creation and development. OECD (2002) experts states that while specific policy priorities may differ across countries, governments have to adopt a comprehensive growth strategy based on a combination of actions in order to:”  “Strengthen economic and social fundamentals, by ensuring macroeconomic stability, encouraging openness, improving the functioning of markets and institutions, and addressing the distributive consequences of change.”  “Facilitate the diffusion of ICT, by increasing competition in telecommunications and technology, improving skills, building confidence and making electronic government a priority.”  “Foster innovation, by giving greater priority to fundamental research, improving the effectiveness of public R&D funding, and promoting the flow of knowledge between science and industry.”  “Invest in human capital, by strengthening education and training, making the teaching profession more attractive, improving the links between education and the labour market and adapting labour market institutions to the changing nature of work.”  “Stimulate firm creation, by improving access to high-risk finance, reducing burdensome administrative regulations and instilling positive attitudes towards entrepreneurship.” “The influence of knowledge to the economic development processes could be analysed through the characteristics of knowledge based economy expression. In other words the reflection of knowledge acquisition, creation, usage and dissemination in the economy should be studied through the expression and penetration of separate elements: human resources, innovation, entrepreneurship and information and communication technologies (ICT). The whole level of knowledge expression in the economy could be evaluated thought the assessment of position and penetration of enumerated elements in economy (Fig. 1).” 2769

ISSN- 2394-5125 VOL 7, ISSUE 6, 2020

Fig 1 : Characteristics of knowledge expression in economy “The influence of knowledge to the development of economic processes becomes possible just in case of functioning of numeral concrete managerial actions. These actions create the conditions for the development of separate knowledge-based economy elements. Figure 2 represents the reflection of all elements of Knowledge-based Economy.”

Fig. 2 : The structure of Knowledge-based Economy Expression “The main elements of knowledge economy are human capital, new and configured knowledge, innovation policy, ICT and entrepreneurship. The first condition for possibility to develop knowledge-based economy is stabile economy (stabile fiscal policy, law inflation, effective money policy and currency policy). Just strong and developed economies can ensure the creation, diffusion and usage of ICT, foster investment in human resources as well as in innovations and stimulate knowledge intensive firm‟s creation. Effective states‟ management policy directly influences the creation of stimulating or restrictive factors, which stipulates or blocks the progress of Knowledge Economy. It is obvious that the most important stipulator of knowledge economy creation is human being. He or she has a good education and abilities not only for usage of created knowledge but create new and meaningful knowledge. Such human being is a part of knowledge society in which significant decisions are made following new knowledge and social norms which are based on ethical and moral values. Therefore Fig. 2 represents human resources which consist of the whole of such human beings[21].”

Instrument for the Assessment of Knowledge Expression in Knowledge-based Economy

“Knowledge-based Economy penetration could be assessed using instrument which includes the properly selected criteria enabling quantitatively assess the results of knowledge acquisition, creation, usage as well as dissemination[22,23]. In order to assess the penetration level of Knowledge-based economy:”  “the penetration of main elements of KBE should be assessed;”  “the criteria should be selected which makes it possible to assess the results of the products of knowledge

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ISSN- 2394-5125 VOL 7, ISSUE 6, 2020 acquisition, creation, usage and dissemination (human resources, innovation policy, innovative business as well as ICT);”  “the elements of KBE are interpreted as knowledge expression characteristics.” Instrument for the assessment of knowledge expression covers[20]:  “an evolvent of criteria of knowledge expression assessment;”  “its application methods.”  “the requirements for the instrument are:”  “it should be flexible in order to consider different purposes of assessment;”  “it should be appropriate to assess the penetration of all characteristics of knowledge expression;”  “it should precise define criteria of assessment;”  “search or calculation of statistical expressions of criteria should be not complicated;”  “could be used as effective instrument seeking to format effective states‟ management policy which would be favorable for the creation and usage of knowledge;”  “could be used as instrument for the highest level of executives seeking to analyse the conditions of knowledge expression not only inside of organization but and outside it.” “The instrument for the assessment of knowledge expression could be applied in some cases: both inside and outside of country or organization[20].” “Considering the limits of the article just construction of evolvent of knowledge expression assessment criteria groups will be presented (Fig. 3).”

Fig. 3 : Evolvent of knowledge expression assessment criteria groups [21] “It has been discovered that to carry out the knowledge expression assessment, the potential of socio-economic conditions has first to be assessed. The proposed technique to do this is by means of assessment of socio-economic context. To establish the knowledge acquisition conditions and quality the assessment of the development of human resources is proposed. To assess the conditions for knowledge creation, the assessment of innovations policy in the country is proposed. To determine the efficiency of knowledge application – the assessment of development of innovative activity should be carried out. To define the quality and conditions for knowledge dissemination the assessment of application of information and communication technologies should be employed. Since the specific character or knowledge expression assessment in the first place depends on the purpose of assessment, two types of assessment are proposed: concentrated and extended. In the case of concentrated assessment 37 criteria and in the extended - 142 criteria to be assessed are listed [20].” Instrument for the assessment of knowledge expression in economy: application fields “Instrument for the assessment of knowledge expression is applicable for the comprehensive and sectorial assessment of the knowledge expression in economy (Fig. 4); as well as constructed to be flexible for different subjects

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ISSN- 2394-5125 VOL 7, ISSUE 6, 2020 [21,22,23].”

Fig. 4 : Application fields of Instrument for the assessment of knowledge expression in economy

Accurate and qualitative knowledge expression assessment stipulates [24,25]:  “the creation of adequate strategy for the states‟ development (macro level). The subjects of macro level [22] (governments, departments of governments, subdivisions of international organizations, municipalities) seeking to constrain favourable environment for organisations to create and use knowledge in order to manage acting under the conditions of knowledge-based economy should be interested in assessment of conditions and quality of knowledge creation and usage.”  “the growth of organisations‟ competence create and apply knowledge inside and outside of country (micro level). The subjects of micro level [22] (business, manufacturing and other organizations; business associations; scientific and research organizations; universities) seeking to achieve competitive advantage under the conditions of knowledge-based economy and make substantial strategic management decisions should be interested in assessment of penetration of knowledge expression characteristics.” “Presented analysis showed the complication of assessment of knowledge-based economy penetration which manifests through the knowledge expression characteristics. However it is possible to constrain systemic instrument which allows to assess the results of knowledge acquisitions, creation, usage and dissemination.”

Conclusions “A new approach was suggested that knowledge-based economy is the result of economic development based on knowledge management as a harmonized system of legal and economic prerequisites and managerial as well as economic mechanisms, modern technologies and human resources, the system resulting from development of and different technologies, in particular, information technologies. The system is rather intricate because it does not lead to economic or social result if any single element of the system is ignored. Only the presence of all of them enables the economic transformation of the country or region towards knowledge-based economy.”

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