Question

Explain why every country needs to have an economy focused on knowledge.

Answer 1

Countries having economy which focus more on knowledge have the potentiality to prosper in greater economic and social sectors as it they keep innovating things which bring development in every aspect of lives. Economy focused on knowledge has closer links with science and technology enabling the country to innovate more for the economic competitiveness and growth. knowledge based economy helps countries to innovate technologies which can produce goods and services more efficiently which could lower the production costs with best qualities. In order to bring revolution in the economy for the welfare of the country and competitiveness, economy focused on knowledge is self sufficient to plan and strengthen its investments, researches and production system which bring more returns. In a simple way, economy focused on knowledge can be termed as ' Knowledge economy' which shifts the traditional economy to modern economy with the application of modern tools and technology in the period of globalisation. It is not only about using high technology or information and communication technology, but how well appropriated knowledge is being used by economy to improve its productivity and welfare. It is very important for a country to remain competitive in the world economy which makes the country bound to invest in quality knowledge inputs rather than capital inputs in order to make each economic sector of it more efficient. The inter link between knowledge and wealth are very significant for the growth and competitiveness of a country's economy. Countries like USA, UK, Japan, Taiwan, Switzerland etc have become most dynamic and economically competitive in the world market due to their substantial investments in knowledge factors over the last few decades. Mere investments in economy will not help countries to bring welfare and development if they don't invest on knowledge for better results. In order to eradicate poverty, unemployment, scarcity of resources etc from developing countries, they should bring changes in their economic policies by focusing more on knowledge economy which could help them to overcome all these economic problems with long term solutions.