the knowledge economy
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THE KNOWLEDGE ECONOMY. Kenneth E. Corey and Mark I. Wilson Michigan State University March 19, 2004. Overview. Awareness Layers E-Business Responsiveness Talk ALERT. Awareness. Knowledge Economy. - PowerPoint PPT PresentationTRANSCRIPT
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THE KNOWLEDGE ECONOMY
Kenneth E. Corey and Mark I. Wilson
Michigan State University March 19, 2004
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Overview
• Awareness• Layers• E-Business• Responsiveness• Talk• ALERT
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Knowledge Economy
• An economy that relies increasingly on technology and knowledge as factors of production & wealth creation – in addition to labor & capital
• Technology & knowledge are transforming wealth-creation work from physically-based functions to knowledge-based functions
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Knowledge Economy
• Pre-eminence of knowledge and information as drivers of economic growth and development
• Part of the structural change process, and the changing significance of occupations and industries
• Challenge for planners is to understand the many dimensions and possible applications of the knowledge economy
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Economic Change
• There are jobs, and there are jobs• Job loss due to technology, outsourcing
and economic change• Loss of manufacturing jobs and low
wage/low skill technology jobs• High-paying IT occupations generally
have expanded since 1999• More than 70,000 computer
programmers lost jobs since 1999; More than 115,000 higher paid computer software engineers gained since 1999
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Economic Change
• Each qtr, US economy generates more jobs than are projected to be lost to offshore outsourcing over the next decades
• Outsourced and offshore jobs also benefit US based firms
• Underscores the need to understand how firms are changing the way they function
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Michigan Planning and Development Regions
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Development Defined
• A widely participatory process of social change in a society intended to bring about both social and material advancement (including greater equality, freedom, and other valued qualities) for the majority of people through their gaining greater control over their environment. (Rogers, Communication Research, 1976, P. 225)
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EDA Investment Guidelines
• Market based• Proactive in nature & scope• Plan beyond immediate horizon,
anticipate economic changes & diversify local & regional economy
• Maximize attraction of private sector investment & would not otherwise come to fruition absent EDA’s investment
• Have a high probability of success• Higher-skill, higher-wage jobs are
created• Maximize return on taxpayer investment
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Internet Use
• Recent survey of Internet use in Michigan (Jan/Feb 2004)
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CEDP Layers
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World Knowledge RegionsBiotech/Pharma Specialization
Tech Clusters: Brennan & Smart ZonesBiosciences Firms Specialization
Tertiary EducationEmpty Areas/New Areas/New SpacesMediated by E-Responsive RegionsMediated by Spatial Distribution of
Distressed Areas
Hierarchy of Multiple Layers
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E-Business Spectrum: In the Information Age and the Global Knowledge
EconomyProduction Functions Consumption
(e-commerce) FunctionsAmenity and Quality
of Life Factors
Science & Technology-driven Research & Development (C)
Online Procurement: B2B & B2G (D)
Social, Cultural and Institutional Activities (C & D)
Commercialization of Products & Services (C)
Online Retailing: B2C & G2C (D)
Natural Environmental Attributes (C)
Business & Producer Services (C) & Manufactured Products (D)
Value-Added Complementarities between Electronic and Physical Channels (C & D)
Educational and Human Capital Capacity Building and Quality (C & D)
The functions and factors that are characterized by clustering and spatial concentration are identified with a “C.” Those that are characterized by dispersion and spatial deconcentration are identified with a “D.”
Relations & Processes
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Biotech and theLife Sciences Corridor
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Responsiveness
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Responsiveness• How well prepared are Michigan’s
cities and regions?• The importance of recognizing change
and preparing for new conditions• ‘Learning Regions’ are areas where
residents and firms are upgrading skills and competitiveness
• Responsiveness is built into institutions and public and private organizations
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Regional E-Readiness
• Survey of directors of Michigan’s 14 planning regions by James Brueckman
• Many recognized the importance of technology, but many not well versed in its characteristics.
• Need for increased awareness and ICT oriented strategic planning.
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Economic Development
• Review of web sites of Michigan’s 83 counties and 14 planning regions for economic development content by Karan Singh
• 25% of counties and 14% of planning regions did not have a web presence
• Based on their web sites, counties classified as leaders (8%), contenders (13%), followers (24%) and laggards (46%)
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E-Responsiveness
• Combine e-Readiness and Web-based economic development effectiveness to produce the e-responsiveness measure
• Most e-responsive areas in Michigan are in the southern and most populous regions of the state
• Least e-responsive areas bracket north and south and nearby the most populous and developed southern corridor of the state
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Intelligent Development
• Draws on contemporary research and theory
• Aware of best planning practice• Investments in places and regions for
wealth creation, higher wage employment and improved quality of life
• Development planning, therefore, is “intelligent” when these best practices are influenced by appropriate theory and the latest science and technologies are utilized fully to develop a community and region holistically and multifunctionally, including amenity factors
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Implications
• Scenarios for intelligent development• State/regions as passive or proactive?• Focus not only on success at advanced
end of spectrum, but there is the need for benefits also to serve distressed areas of the state
• Regional planners can engage in intelligent development to plan for more competitive sub-state planning regions in the global knowledge economy
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Distressed Communities
Geography of Economic Distress+
Geography of E-Responsiveness
Scenario 1
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Scenario 1• Action options:• Most e-responsive and
economically distressed.• Somewhat e-responsive and
Economically distressed.• Least e-responsive and
Economically distressed.• Most e-responsive and Not
economically distressed.
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Spreading the Benefits
Pre-Existing Potential Institutions+
Planned Relationships
Scenario 2
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Human Resources Linkages
Education Institutions + Performance
+Enterprise Culture + Smart Zones
+Distressed Cities
Scenario 3
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Action• Invest in human resources and education at all
levels• Develop and sustain an enterprise culture of
innovation and entrepreneurship• Develop transition programs & incentives to
address local job dislocations & new job opportunities
• Insist on leveling the playing fields at outsourcing locations abroad as those economies prosper, i.e., wages, environmental & labor regulations, etc.
• In the end, it boils down to creativity & competitive advantage, a diversified local economy and flexibility and adaptability !!
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Action
• When You Leave Today:• Human Resources & Human Capital• Development of an Enterprise
Culture• Private-Public Partnerships of
Stakeholders: Leadership, Vision, Champion(s)
• Change Mindsets & Governance of Leaders & Planners: Embed Behavior
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www.electronicspace.org
Kenneth E. Corey and Mark I. Wilson
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NEXT WAVE PRODUCTIVITY GROWTH
Globalization (jobs being done abroad) of IT software & services (rather than emphasis on hardware) = more cost-effective & superior services; lower prices = greater use of IT & transformation throughout the economy will propel US toward 2nd wave of faster productivity growth = greater demand for IT-related jobs spread throughout the economySufficient skilled workers at home can retain & attract superior jobsEarly IT adopters deepen IT investment & transformationExtend IT investment & transformation to economic sectors that did not participate in the productivity growth of the 1990s, i.e., health services, construction & SMEsInterdependence of these factors & dynamics should not be broken by protectionism & insufficient skilled workers at home