Tony WeirAustralian Bureau of Statistics

Measuring a Knowledge Based Economy and Society

(email: tony.weir@abs.gov.au)

A knowledge-based economy is an economy in which the production, distribution and use of knowledge is the main driver of growth, wealth creation and employment across all industries. (OECD 1996, APEC 2000)

Definition

“The ability to create, distribute and exploit knowledge is increasingly central to competitive advantage, wealth creation and better standards of living…While the overall trends are clear, large differences remain within the OECD area.” (OECD (2001)

Motivation

Approaches to KBE/S measurement

• Statistical indicators within the context of a descriptive framework

• A KBE/S index

• Direct measurement of knowledge

Why create a KBE/S framework?

• ABS thought it important to present measures of the knowledge based economy and society.

• A framework provides a structure and logic for statistical content.

• We call our framework a “descriptive framework”.

Basis of the KBE/S framework

• OECD New economy: beyond the hype (2001)

• Asia-Pacific Economic Co-operation (APEC) Towards KBEs in APEC (2000)

• ABS work on social capital etc.

Structure of the KBE/S framework

• Three core dimensions– Innovation and entrepreneurship– Human capital– Information and communications technology.

• Two supporting dimensions– Context– Economic and social impacts.

Simplified framework structureContext

Innovation & entrepreneurship

Information and communications technology

Human capital

Economic and social impacts

Numerous context influences

Structure of the framework (ctd)

• Each dimension is described in terms of:– characteristics– indicators (quantitative measures of

characteristics)

Example

• Dimension: – Human capital

• One characteristic from the dimension: – Stock of skilled people

• One indicator of this characteristic: – Highest completed level of educational

attainment of the population, by age and sex.

Indicators of the framework

• Ideally an indicator should be:– relevant to the characteristic it is measuring– supported by relevant and timely data– sensitive to what it is measuring– intelligible– available for several periods, including recent

ones– available for other countries.

Status of the ABS framework

• Publication of a Discussion Paper in August 2002

• Parallel release of HTML version– with hot links to data sources for statistical

indicators

• Much data already published elsewhere.

Knowledge-intensive Industries, 1998% of total gross value added

0 10 20 30 40 50

Norway (1997)

AUSTRALIA

Canada (1997)

Korea

Finland

OECD (23)

France

United Kingdom

Germany

United States

% of GVA

Other Knowledge-intensive services

High and medium-high-technology manufactures

Health and Education

Knowledge Workers as % of employed people, 2000

0% 10% 20% 30% 40% 50%

Japan

Ireland

United States

AUSTRALIA

United Kingdom

New Zealand

Canada

Germany

Sweden

Finland

25

28

31

34

37

40

1989 1993 1997 2001

% s

hare

of t

otal

em

ploy

men

t

High

Medium

Low

Proportion of skilled occupations, 1989-2001

Investment in Knowledge, 1998(Broader definition, as a percentage of GDP)

0 2 4 6 8 10 12 14

Ireland

AUSTRALIA

United Kingdom

Japan

Germany

OECD Total

Canada

Korea

United States

Sweden

% of GDP

R&D

Software

Higher education

Other levels of Education

“Workers will require the ability to create, analyse and transform information and to interact effectively with others…. Learning will increasingly be a lifelong activity.”

-Alan Greenspan (July 2000)

0 20 40 60 80

Japan

Korea

Ireland

US

AUSTRALIA

New Zealand

Malaysia

Mexico

Percent

Percentage who have NOT completed school 1999

Trends in multi-factor productivity growth*

0.0 1.0 2.0 3.0 4.0 5.0

Ireland

Finland

AUSTRALIA

Canada

Sweden

United States

Norway

Germany

United Kingdom

Japan

New Zealand

% change p.a.

1990-95

1995-99

Contribution to labour productivity growth in Australia and the US over the late 1990's*

1.30.9a

0.1

0.4

2.0

1.6

0

0.5

1

1.5

2

2.5

3

3.5

4

US(1) AUSTRALIA(2)

% in

cre

ase

pe

r ye

ar

MFP grow th

Other Capital

ICT Total

Collaboration, by type of innovation, by country, 1999

0 1 2 3 4

AUSTRALIA

Austria

Denmark

Norway

Sweden (EastGothia)

Number of collaborators per innovative firm, by category

Suppliers

Customers

Other

Au

stra

lia

0 1 2

BUSINESS ENVIRONMENT

KBI (%GDP)

Services Exports (%GDP)

HT Export (% mfg exports)

FDI /GDP

Govt Transparency

Financial Transparency

Competition Policy

Openness

INFORMATION AND COMMUNICATIONS TECHNOLOGY

Mobile Telephones p.c.

Phone lines p.c.

Computers p.c.

Internet Users p.c. (1999)

Internet Users p.c. (2001)*

e-commerce (%)

INNOVATION SYSTEM

Researchers p.c.

GERD /GDP

BERD / GDP

US Patents p.c.

Company co-op

Company-uni co-op

HUMAN RESOURCE DEVELOPMENT

Secondary Enrolments

NSE Graduates p.c.

% Knowledge Workers

HDI

0

1

2

0

1

2

0

1

2

0

1

2

0

1

2

0

1

2

Korea

Australia

Canada

S’pore

Bus Env ICT Innov Sys HRD

X

“If governments and their citizens are not to be swept away in the ‘gales of creative destruction’ marking the evolution of the knowledge economy, they will need to fill the vacuum in understanding which currently exists.”

- A. Burton-Jones, Knowledge Capitalism (1999)

Comments are sought on all aspects of the framework

• theoretical and empirical basis• structure and choice of dimensions &

characteristics• range of indicators proposed including priorities• dissemination possibilities

– comprehensive compendia

– thematic publications

– frequent summary releases in paper or via Web.