The knowledge-driven economy
A Department of Trade and Industry case study

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Page 1: Introduction

Department Of Trade And Industry 5 Image 2There are many examples of business organisations which, because they have previously been successful, have continued to follow previous strategies without considering the circumstances they are in. In the short-term they succeed and progress. However, because they do not consider circumstances, and change their direction, they court disaster.

This case study focuses upon the findings of the Department of Trade and Industry which illustrate how the development of a knowledge-driven economy is providing the basis for the UK to close the performance gap on its competitors.

The speed with which electronic communications, information and knowledge cross the world in today’s global market place could not have been envisaged by managers 20 or 30 years ago. It is simply not possible for managers to rely on business strategies used by their predecessors owing to an increasingly complex environment. Today, there is a need for people within organisations to move forward and constantly learn and question their understanding. The development and use of knowledge allows them to adjust to these processes of rapid change.

The Industrial Revolution was built on capital investment in plant and machinery, the use of manual skills and hard labour. Today’s information and knowledge-driven revolution is based on a different foundation in which knowledge has become the predominant element in the creation of wealth.

The growing importance of knowledge is clearly evident. It is perhaps most obvious in the personal computers, mobile phones and sophisticated electronics and communications industry. It can be claimed that two-thirds of the value of a modern motor car is the knowledge that went into designing, engineering and building it, as only one third pays for the raw materials. It is this knowledge that enables a team of people in another part of the world in countries like South Korea, to compete so successfully with many of the huge household names we know so well in this country.

Department of Trade and Industry | The knowledge-driven economy